Understanding salary terms like CTC, LPA, and in-hand salary often feels confusing, especially for students, freshers, and even working professionals. Most people see a yearly package on their offer letter and assume that the entire amount will land in their bank account. But when the first salary arrives, the number sometimes feels much lower. This is where concepts like PF, ESI, taxes, and deductions come into play.
This detailed guide explains everything you should know about the 7.2 LPA in hand salary, how deductions work, how much you actually get per month, and how it compares with other popular salary slabs. The explanations are simple, practical, and useful for anyone trying to understand their real take home pay in India.
What Exactly is LPA, CTC, and In Hand Salary
Before calculating the 7.2 LPA in hand salary, it is important to understand the three most used salary terms.
LPA Meaning
LPA means Lakh Per Annum. It shows how much salary you get in one year.
For example, 7.2 LPA means your total annual salary is 7 lakh 20 thousand rupees.
CTC Meaning
CTC means Cost To Company. It includes your salary plus all the extra benefits and expenses the company spends on you.
CTC may include:
• Basic salary
• HRA
• PF employer contribution
• Gratuity
• Insurance
• Bonuses
Not all components of CTC are paid to you directly.
In Hand Salary Meaning
In hand salary is the actual amount you receive in your bank account every month. It is also called take home salary.
In hand salary is always lower than CTC because of deductions like:
• PF
• Professional tax
• Income tax
• ESI
• Other company deductions
This difference between CTC and actual earnings is why understanding salary breakup is important.
7.2 LPA In Hand Salary Per Month Calculation
Let us break down the in hand salary for a package of 7.2 LPA. Because every company offers a different structure, this calculation uses a standard Indian salary model.
Step 1: Convert LPA to Monthly CTC
7.2 LPA divided by 12
7,20,000 ÷ 12
= Rs 60,000 CTC per month
But remember, monthly CTC is not your take home.
Step 2: Typical Salary Structure for 7.2 LPA
A common breakup for a 7.2 LPA package looks like this:
| Salary Component | Monthly | Yearly |
|---|---|---|
| Basic Salary | 24,000 | 2,88,000 |
| House Rent Allowance | 12,000 | 1,44,000 |
| Special Allowance | 18,000 | 2,16,000 |
| Employer PF | 2,160 | 25,920 |
| Other Benefits | 3,840 | 46,080 |
Step 3: Monthly Deductions on 7.2 LPA
| Deduction | Monthly | Yearly |
|---|---|---|
| Employee PF | 2,160 | 25,920 |
| Professional Tax | 200 | 2,400 |
| Income Tax plus Cess | 3,000 to 4,000 approx | 36,000 to 48,000 approx |
Income tax depends on whether you choose old regime with deductions or new regime with lower tax rates.
Step 4: Final 7.2 LPA In Hand Salary Per Month
Average in hand salary per month becomes:
60,000 minus (PF 2,160 plus professional tax 200 plus income tax approx 3,500)
= approx 54,000 per month
Final Estimate: 7.2 LPA In Hand Salary
• Monthly in hand salary approx 53,000 to 55,000
• Yearly in hand salary approx 6,40,000 to 6,60,000
This can vary slightly based on the company structure and tax regime.
Why Your In Hand Salary is Lower Than 7.2 LPA
Many people get confused when they receive a lower take home than expected. Here is why deductions happen.
1. PF Deduction
PF is 12 percent of your basic salary.
The company also contributes 12 percent but their part does not come to your bank account. It goes into your PF account.
PF is a long term saving designed for your retirement.
2. Income Tax Deduction
Income tax is mandatory if your income is above the basic exemption limit. Both old and new tax regimes are available. Choosing the right regime helps you increase your savings.
3. Professional Tax
Some states charge a small monthly tax from salaried employees. It is usually between 200 to 250 per month.
4. ESI Deduction
If your salary is below 21,000 basic pay, ESI is deducted. For a 7.2 LPA salary job, ESI usually does not apply.
5. Other Company Deductions
These include insurance premiums, food card charges, or other benefits.
Comparison With Other Salary Slabs in India
To understand 7.2 LPA better, here is a comparison with other popular salary packages.
1. In Hand Salary for 5 LPA
Approx monthly take home
35,000 to 38,000
After PF and tax deductions, the final in hand amount reduces.
2. In Hand Salary for 10 LPA
Approx monthly in hand
70,000 to 75,000
Tax increases significantly in higher salary slabs.
3. In Hand Salary for 20 LPA
Approx monthly in hand
1,20,000 to 1,40,000
Tax planning becomes very important here.
These comparisons help you understand that CTC and take home are very different.
How Bonuses and Incentives Affect In Hand Salary
Companies often provide annual bonuses, joining bonuses, or performance incentives.
There are two types:
1. Fixed Bonus
Added to yearly CTC. It is taxable and may be paid once a year.
2. Performance Incentive
Given based on your work. This amount is also taxable.
Example
If your yearly bonus is 60,000
You may receive around 40,000 to 45,000 in hand after tax.
So, bonuses increase yearly income but not monthly take home.
Tips To Increase Your In Hand Salary
Even with a fixed package, you can improve your take home amount.
1. Choose the Right Tax Regime
The new regime offers lower tax rates.
The old regime offers more deductions like:
• 80C investments
• House rent allowance
• Home loan interest
• Medical insurance premium
Choose the one that gives you maximum savings.
2. Ask for a Higher Basic or Lower Basic Depending on Your Goal
A higher basic increases PF but reduces in hand.
A lower basic reduces PF deduction but increases take home.
3. Use Tax Saving Investments
You can claim tax benefits using instruments like:
• ELSS
• PPF
• Life insurance
• Home loan
• NPS
4. Use Benefits Offered by Company
Many companies offer meal cards, fuel reimbursements, and phone bill reimbursements which are tax free.
5. Take Advantage of Health Insurance
If the company provides insurance, you can save money that you otherwise spend on private policies.
Real Life Example of Salary Understanding
Imagine your friend earns 10 LPA.
The CTC sounds high but after PF, tax, and deductions, the in hand comes to around 70,000 to 75,000 per month.
This shows why understanding components like basic salary, PF, HRA, and tax slabs is important before accepting an offer.
The same applies for someone earning 7.2 LPA. Even though the package looks great for a fresher or early career employee, the real in hand amount becomes around 53,000 to 55,000.
Knowing this helps you plan better, negotiate better, and make smarter decisions.
Conclusion
Understanding your salary is the first step to better financial planning. Whether you are earning 7.2 LPA or any other package, knowing the difference between CTC and in hand salary helps you avoid confusion and set realistic expectations. Once you understand how PF, taxes, and deductions work, you can take steps to increase your take home pay through tax saving investments and smart planning.
Knowing your 7.2 LPA in hand salary also helps you compare job offers, negotiate better, and choose benefits wisely. Salary is not just a number on an offer letter. It is a complete structure that must be analyzed carefully. With clear understanding and proper planning, you can make the most of your earnings.
FAQs
1. What is the 7.2 LPA in hand salary per month
The in hand salary for 7.2 LPA is usually around 53,000 to 55,000 per month depending on taxes and deductions.
2. Is 7.2 LPA a good salary in India
Yes, it is a good salary for freshers and early stage professionals, especially in IT, finance, and technical roles.
3. Why is my in hand salary much lower than my CTC
Because CTC includes PF, gratuity, insurance, and employer expenses which are not paid directly to you.
4. How can I increase my in hand salary
You can choose the right tax regime, reduce taxable income through investments, and take advantage of company allowances and reimbursements.
5. Is PF good or bad for take home salary
PF reduces your take home but helps in long term savings and retirement planning. It is beneficial in the long run.
Read more
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