7 LPA in hand: the short answer
Between 6 and 9 LPA most salaried people pay zero income tax under the new regime, so the CTC-to-in-hand gap is all about PF, gratuity and professional tax. A 7 LPA offer works out to about ₹49,723 a month in your bank account, or 85% of CTC. The old regime cannot beat that at this income, because the new regime already brings the tax to nil.
Per month that means a gross salary of about ₹53,431 on the payslip, minus ₹3,500 of your own PF, ₹208 average professional tax and no TDS. Professional tax is actually deducted as ₹200 a month and ₹300 in February in Karnataka and Maharashtra.
Typical salary structure for a 7 LPA package
| Component | Per year | Per month |
|---|---|---|
| Basic salary 50% of CTC — the base for PF, gratuity and HRA | ₹3,50,000 | ₹29,167 |
| House rent allowance (HRA) 40% of basic; tax-exempt only in the old regime | ₹1,40,000 | ₹11,667 |
| Special allowance balancing figure, fully taxable | ₹1,51,173 | ₹12,598 |
| Employer PF contribution 12% of basic, credited to EPF/EPS | ₹42,000 | ₹3,500 |
| Gratuity (provision) 15/26 of a month’s basic per year of service | ₹16,827 | ₹1,402 |
| Total CTC | ₹7,00,000 | ₹58,333 |
Since the new labour codes took effect on 21 November 2025, “wages” (basic + DA) should be at least half of total pay, which is why many employers now set basic close to 50%. If your employer still uses a 40% basic, PF and gratuity are smaller and the monthly in-hand rises to about ₹51,403 (+₹1,680) — but your retirement savings fall by ₹1,400 a month.
CTC to in-hand: what gets deducted and why
Employer PF (₹42,000/yr) is part of your CTC but goes straight to the EPFO: 8.33% of basic (capped at ₹1,250 a month) into the pension scheme (EPS) and the rest into your EPF balance. Gratuity (₹16,827/yr) is a provision — you receive it only after five years of continuous service (one year for fixed-term employees under the labour codes). Many offer letters show both inside CTC, which is the main reason CTC ÷ 12 overstates take-home.
Employee PF (₹42,000/yr) is your 12% share, deducted every month. Income tax under the new regime is worked out on gross salary minus the ₹75,000 standard deduction: ₹6,41,173 − ₹75,000 = ₹5,66,173 taxable, fully covered by the rebate up to ₹12 lakh (section 87A under the old Act, carried into the Income-tax Act 2025 that applies from 1 April 2026).
Professional tax by state at 7 LPA
| State | PT / year | Monthly in-hand |
|---|---|---|
| Karnataka | ₹2,500 | ₹49,723 |
| Maharashtra (men) | ₹2,500 | ₹49,723 |
| Maharashtra (women) | ₹2,500 | ₹49,723 |
| Tamil Nadu (Chennai) | ₹2,500 | ₹49,723 |
| Delhi, Haryana, UP | ₹0 | ₹49,931 |
Karnataka: ₹200/month (₹300 in February) when monthly gross is ₹25,000 or more (amended from 1 April 2025). Maharashtra: ₹2,500 a year above ₹10,000/month; women earning up to ₹25,000/month are exempt (2023 amendment). Tamil Nadu: half-yearly slabs, ₹1,250 per half-year above ₹75,000 (Chennai Corporation rates; other local bodies may differ). Delhi, Haryana and Uttar Pradesh levy no professional tax on salaries.
Old vs new tax regime for 7 LPA
| New regime | Old regime | |
|---|---|---|
| Gross salary | ₹6,41,173 | ₹6,41,173 |
| Standard deduction | −₹75,000 | −₹50,000 |
| Professional tax | — | −₹2,500 |
| HRA exemption (rent ₹12,000/month, metro) | — | −₹1,09,000 |
| 80C (EPF only) | — | −₹42,000 |
| 80D health insurance | — | — |
| Taxable income | ₹5,66,173 | ₹4,37,673 |
| Tax + cess | — | — |
| Monthly in-hand | ₹49,723 | ₹49,723 |
Old-regime example (assumption): living in a rented flat in a metro at ₹12,000/month. From 1 April 2026 the 50% HRA limit applies in Mumbai, Delhi, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad (Income-tax Rules 2026); 40% elsewhere.
Both regimes give the same result here because tax is nil either way — the new regime wins on simplicity: no proofs, no rent receipts.
If part of your 7 LPA CTC is variable pay
Suppose 10% of the package (₹70,000) is a performance bonus paid once a year. Basic, PF and HRA are then calculated on the fixed ₹6,30,000, so the monthly in-hand during the year is about ₹44,730, and the bonus month adds roughly ₹70,000 after its TDS (if paid at 100%). Over the full year that is ₹6,06,756 — +₹10,083 versus an all-fixed CTC, because PF is charged on a smaller basic.
How 7 LPA compares with nearby packages
| CTC | CTC/month | In-hand/month | Tax/year | In-hand % |
|---|---|---|---|---|
| 4.5 LPA | ₹37,500 | ₹31,890 | ₹0 | 85.0% |
| 5 LPA | ₹41,667 | ₹35,457 | ₹0 | 85.1% |
| 6 LPA | ₹50,000 | ₹42,590 | ₹0 | 85.2% |
| 7 LPA | ₹58,333 | ₹49,723 | ₹0 | 85.2% |
| 8 LPA | ₹66,667 | ₹56,856 | ₹0 | 85.3% |
| 9 LPA | ₹75,000 | ₹63,989 | ₹0 | 85.3% |
| 10 LPA | ₹83,333 | ₹71,122 | ₹0 | 85.3% |
For a second view with EPF on full basic but no gratuity inside CTC, see our ₹7 lakh salary in-hand table — useful if your offer letter lists gratuity separately.
Budgeting ₹49,700 a month
The 50/30/20 split is only a starting point — in Mumbai or Bengaluru rent alone can swallow most of the “needs” share at this income. Remember that you are already saving ₹7,000 a month through EPF (both shares), so your real savings rate is higher than the 20% shown.
Tips to get more in hand from 7 LPA
- Negotiate on fixed pay. Every extra ₹1 lakh of CTC adds only about ₹7,133 a month to your in-hand at this level, so when negotiating, compare offers on fixed monthly in-hand, not CTC. Ask whether the CTC includes gratuity, insurance premiums, joining bonus or ESOPs — they inflate the headline without changing your monthly pay.
- Employer NPS. Employer NPS (14% of basic, deductible in the new regime) saves no tax at 7 LPA because your tax is already nil — choose it only if you want extra retirement savings, as it would lower your monthly in-hand by about ₹4,083.
- Tax-free reimbursements. Phone/internet bills and books/periodicals reimbursed against bills remain tax-free in both regimes; meal cards and LTA help only in the old regime.
- If you rent, keep rent receipts anyway: they are worthless in the new regime but useful if your income rises and you ever move to the old regime with a home loan.