Question 1

What is CTC?

Accepted Answer

CTC (Cost to Company) is the total expense a company incurs for an employee, including basic salary, allowances, PF contributions, bonuses, and other benefits.

Question 2

What deductions reduce take-home salary?

Accepted Answer

Common deductions include Employee Provident Fund (EPF - 12% of basic), Professional Tax (₹2,400/year in most states), income tax (TDS), and optional deductions like insurance premiums.

Question 3

How is basic salary calculated from CTC?

Accepted Answer

Basic salary is typically 40-50% of CTC. It forms the base for calculating other components like HRA, DA, PF contributions, and gratuity.