Many freshers and early job seekers find 2.5 LPA package offers. Candidates usually struggle to find out how much they will get in hand at a 2.5 LPA package. The offer letter contains the salary figure as CTC (Cost to Company). Many components are deducted from the CTC, and you get the remaining amount as your In-hand salary. The deductions include income tax, professional tax, PF, etc.
The in-hand salary is always lower than a CTC because of the deductions. Here, we will learn more about the 2.5 LPA in hand salary.
What does 2.5 LPA mean?
2.5 LPA means Rs. 2,50,000 per year CTC. People usually divide 2.5 lakhs per annum by 12 to calculate the monthly salary. But it is the wrong method. You need to consider the deductions also while calculating the in-hand salary. The gross monthly salary is Rs. 20,833, but your in-hand salary will be less.
Common Components of a 2.5 LPA Salary Structure
There are some common components in the salary structure of every company. Here is the salary structure of 2.5 lpa in hand salary in the hand package.
- Basic Salary
- Dearness Allowance (in some companies)
- HRA (House Rent Allowance)
- Conveyance Allowance
- Medical Allowance
- Special Allowance
- PF Employer Contribution
- PF Employee Contribution
- Gratuity
- Professional Tax
- TDS (if applicable)
Breakdown of 2.5 LPA Salary per month?
Here is the breakdown of a 2.5 lpa in hand salary per month in most private companies in India:
| Salary Component | Amount (₹) |
| Gross Monthly Salary | 20,833 |
| Basic Salary (40%–50%) | 9,000 |
| HRA (40% of Basic) | 3,600 |
| Conveyance Allowance | 1,600 |
| Medical Allowance | 1,250 |
| Special Allowance | 5,383 |
| Total Gross | 20,833 |
Read Also: 4 LPA in hand salary
2.5 LPA Deductions Per Month
Monthly deductions from a 2.5 lpa in hand salary package are mentioned below in table:
| Deduction | Amount (₹) |
| Employee PF Contribution (12% of Basic) | 1,080 |
| Professional Tax | 200 |
| TDS | 0 (Because income is below the tax slab) |
| Other Deductions (company-specific) | 0 |
| Total Deductions | 1,280 |
Final In-Hand Salary Per Month
Monthly in hand salary will be Rs. 18,000 to Rs. 21000 per month with a 2.5 LPA CTC. here is the simple way to calculate:
Gross amount – Deductions = In-hand salary
Rs. 20,833 – Rs. 1280 = Rs. 19,553
Yearly In-Hand Salary for 2.5 LPA
Here is the complete breakdown of the yearly in-hand salary for a 2.5 LPA:
| Item | Amount |
| Annual Gross CTC | ₹2,50,000 |
| Annual Deductions (₹1,160 × 12) | ₹13,920 |
| Annual In-Hand Salary | ₹2,36,080 approx |
Why Is the In-Hand Salary Lower than CTC?
Many freshers have this question: why is our in-hand salary lower than CTC? Here we will clarify your doubts:
- PF deductions
PF is deducted every month from the employee’s CTC. It is mandatory but offers various long-term benefits. The same amount is deposited by the employer every month, which augments the savings.
- Professional Tax
The professional tax deduction is only available in some states in India. If you work in a state that comes under professional tax policy, it will be deducted from your salary.
- Allowance structure
Companies offer various allowances that add to your basic salary. It can help you get more than your basic salary. If your fixed salary is much lower than your CTC, you can negotiate on allowance with the company.
What are the factors affecting the 2.5 LPA in hand salary?
There are various factors that affect the 2.5 LPA in hand salary, as mentioned below:
- Location
If you are living in cities with a lower cost of living, you can have a good and comfortable lifestyle with a 2.5 LPA in hand package. On the other hand, you will find it hard to fulfill your needs at this package in higher cost-of-living cities such as Delhi, Pune, Bangalore, etc.
- Industry
Some industries, such as IT, finance, etc, offer you a higher in-hand amount at a 2.5 LPA salary. It is due to lower deductions and more benefits. While lower-paying industries such as education, Hospitality, etc, can give you a lower monthly in-hand amount.
- Experience
A fresher joining a company with 2.5 LPA will usually get a lower in hand monthly amount. But once you get experience, you can negotiate with the company for basic salary and allowances to increase your in-hand amount.
Conclusion
The 2.5 lpa in hand salary package looks decent, but the actual in-hand salary is lower. The amount you get monthly will be Rs. 18,800 to Rs. 20,000. Your in hand salary depends on various factors including PF, deduction, etc. you must understand CTC and your in hand salary properly to make a strategic financial plan.
FAQs
Q1)What amount will I get in hand from the 2.5 LPA package?
If a company offers you a 2.5 LPA package, you will get approximately Rs. 18000 to Rs. 20000 in hand salary per month.
Q2)is there an income tax deduction applicable to the 2.5 LPA in hand salary?
No, there is no income tax deduction applicable to the 2.5 LPA in hand salary. It is because the salary falls below the income tax slab under the new regime.
Q3)What is the reason that my in-hand salary is lower than CTC?
The reason behind this is the deductions from your CTC. CTC means the cost to the company. There are various deductions, such as PF, PT, etc, that are deducted, and you get the remaining amount as in-hand salary.
Q4)What kind of lifestyle can I have with 2.5 LPA in Delhi?
Delhi and other metro cities usually have expensive living which will make it hard for you to meet your needs with 2.5 LPA. you need to find ways to manage your budget.
Q5)Is it possible to negotiate for a higher salary at 2.5 LPA?
Yes, you can negotiate for a higher basic pay and other perks offered by the company. Some companies also offer an opt-out option for PF deductions.