In this post you will learn the definitions and differences between CTC and Take home salary or net salary in India. CTC full form is Cost To Company. It means total salary package and benefits received by employee in a year including free meals, cabs, interest free loans.It includes each and every thing that the company spends on you-your salary, allowances, training cost, canteen facilities, travelling facilities, medical facilities and all!
It also includes HRA, Provident Fund (PF) and Medical Insurance among other allowances which are added to the basic salary.
Components of CTC:
BASIC SALARY
Recruitement cost
DA
HRA
Allowances
PF
Net Salary or Take-Home Salary:
Take-Home Salary or Net Salary is the income that the employee actually gets after tax and other such deductions.
Net Salary means just the monetary/fiscal amount that you get in your hands after all mandatory deductions like Income Tax, EPF etc.,. It doesn’t include other kind of expenses than just the monetary element.
Both are just terms to refer salary. To put more simply,
CTC refers to total amount the company invests on you in an year.
After deduction of tax, the net amount you get in month end is called Net salary.
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