Gross salary = fixed pay + allowances (before deductions), i.e. CTC minus employer-side retirals. Net salary (take-home) = gross minus employee deductions: employee PF, professional tax, TDS (income tax), and any recoveries. Understanding this chain - CTC → gross → net - is basic financial literacy every employee needs.
In India
Standard Indian deductions from gross: employee PF (12% of basic), professional tax (state-wise, up to ₹2,500/yr), and TDS per the chosen tax regime.
In practice
Gross ₹1,20,000/month. Deduct employee PF ₹6,000 (approx), PT ₹200, TDS ₹9,800 → net take-home ≈ ₹1,04,000. The employer's own PF and gratuity sit above gross, inside CTC.