CTC Full Form

The full form of CTC is Cost to Company, i.e., the cost incurred by a company on an employee yearly. It is very different from the in-hand salary of an employee. In-hand salary will be every month, whereas CTC will be every year.

CTC full form comprises the basic salary plus the perquisites and other allowances. The take-home salary is devoid of many of CTC components and so will be lesser than CTC.

The different components of CTC are given below:

• Basic Salary
• Dearness Allowance
• CCA
• Employees Provident Fund (EPF)
• Bonus
• Incentives
• House Rent Allowance
• Medical Allowance
• Leave Travel Allowance
• Vehicle Allowance
• Special Allowance
• Telephone Bill/Mobile Bill
• Conveyance Allowance
• Perquisites

Gross salary is the Basic Salary + DA + HRA+Other Allowances every month.

Net Take-Home salary is also calculated on a monthly basis, but it is the salary after the statutory and other deductions from Gross Salary. The deductions will be EPF/PF, Income Tax, Professional Tax and other deductions as per the HR policies of individual Companies.

Basic Salary 
Basic salary forms about 40 to 45% of CTC, and it is the largest component of CTC. The Gross Salary is calculated by adding the other components of the CTC to the Basic Salary. 
Dearness Allowance 
Dearness Allowance is fixed at a percentage of the basic salary and is generally provided to hedge the impact of inflation.  
CCA (City Compensatory Allowance) 
To compensate for the cost of living in larger cities, CCA will be paid to the Employees and will be a part of the gross salary. 
Employees Provident Fund 
It will be the Employer's contribution towards Provident Fund, which will be equivalent to the employees' contribution. 
Bonus 
Bonus is the profit of organisation shared among the employees who will generally be 8.33% of the salary. The percentage of share may, however, differ from organisation to organisation. Bonus can also be considered a token of appreciation of the good work done by the Employees and will be paid on a yearly basis. 
Incentives 
The performance of every employee will be evaluated on a yearly basis, and an additional remuneration will be paid. There will be a maximum limit set for incentive per employee, which again differs from organisation to organisation. 
House Rent Allowance 
It is a way of providing accommodation to the employee if he/she has to live in a rented house.  
Medical Allowance 
Medical allowance is provided by the Company for managing the medical expenses of the employee. This will be a fixed amount and will be added to the Basic Salary.

Leave Travel Allowance 
LTA is the fair cost for travel inland given by the Company. The cost of food and stay during the vacation should be borne by the employees. 
Vehicle Allowance 
When a personal vehicle is used for work, then the Company reimburses the cost incurred for the maintenance of the Vehicle. 
Special Allowance 
Special Allowance is a fixed amount provided by the Company over and above the basic salary to meet certain requirements. There are different categories of special allowance, some of which are taxable and others exempt from tax as well. 
Telephone/Mobile Bill 
Reimbursement of monthly mobile/telephone bill, which is again a fixed amount. 
Conveyance Allowance 
The Company provides for the cost incurred for commuting from residence to the workplace in the form of Conveyance Allowance.  
Perquisites 
Perquisites are benefits that are non-financial and are awarded as per the position of the employee in the Company. It could be by way of a Car, Mobile Phone, Internet Connection, Accommodation etc.

With the confusion of understanding the difference between the CTC Full Form and the Take-Home Salary cleared, you will now l give the Take-Home Salary figure whenever you are asked about your monthly income. You approach a bank or any other financial institution for a loan, the first thing the concerned official will ask you is about your take-home salary. The net take-home salary will be considered while calculating the debt to income ratio and also the loan amount. The loan will never be based on the CTC.