ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Net salary, more commonly known as Take-Home Salary, is the income that the employee actually takes home once tax and other such deductions are carried over with. It refers to the in-hand figure that is calculated after deducting Income Tax at source (TDS) and other deductions as per the relevant company policy.

Detailed explanation-2: -Take-home salary or the In-hand salary is the amount which the employee receives after the tax, and other deductions are carried over. The difference between gross and net salary is that the salary that includes the income tax, professional tax, and other company policy deductions subtracted from the gross salary.

Detailed explanation-3: -Figure out the take-home pay by subtracting all the calculated deductions from the gross pay, or using this formula: Net pay = Gross pay-Deductions (FICA tax; federal, state and local taxes; and health insurance premiums).

Detailed explanation-4: -Net pay means take-home pay or the amount employees earn after all payroll deductions are subtracted from their gross pay.

Detailed explanation-5: -Components of Cost to Company (CTC) This is the amount that is payable to the employees for their services to the organisation. It forms a part of their take home salary and is subject to income tax. Usually, employers make sure that the basic salary does not constitute more than 40% of the overall CTC.