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Thekla924 Jan 25th, 2009 05:43

Cost of Living and wages here?
Hi, We're trying to figure out if CTC 10 lahk is an ok, great or low compensation for a european professional with family to live on in Kolkata. We'd be wanting to be able to rent a flat and send 1 kid to school--the other is in college (of course that is also an expense!) I'd also like to be able to afford some household help--cleaning,laundry--maybe some cooking.

We had never heard of compensation in CTC, much less lahks! We bill for freelance work. I've been researching this but without knowing what is included in the CTC and what the cost of living is, I'm struggling. Is there a rough percentage that you can assume will be your take-home?

Any suggestions?

indiaprof Jan 25th, 2009 13:09

A lakh = 100,000. So, 10 lakhs = 1 million. Is this per month or for an entire year?

capt_mahajan Jan 25th, 2009 14:01

Assuming CTC is annual,as it usually is.

It is enough, but not enough to live an expat lifestyle. Even an 'international'school for the one child may be expensive. Apartment rentals can vary widely, too.

Provided you pay Indian income tax --- for take home deduct about 30 percent for rough figure- if two of you total 10 lacs annually (ie if 2 salaries) then you can deduct maybe 20/25 percent on each.

CTC means cost to company. Nothing extra will be given. In fact, depending on details, a little amount may be deducted each month for EPF (employee provident fund) and professional tax - provided you fall under those provisions.

I would say, without knowing details of what you do, that this is a pretty low figure of CTC for an expat.

Disclaimer: Not an expert.

Thekla924 Jan 25th, 2009 20:03

Thanks for the responses guys---it really helps to hear from people who know. :-)

As this is "max CTC", I'm assuming that this is annual(sounds like I wish it were monthly although as a monthly amount, that would seem incredibly huge!). I wonder if there is any room to negotiate in their "max"? This is based on one wage earner. I thought everyone was required to pay Indian income tax. Are there exceptions? My husband is a German citizen. We'll need the international school and although we don't want a villa, a decent flat with a/c is not negotiable.

The job market is so tough right now we're willing to start a little simple and work for advancement with a good company---but 'simple' has to be at least reasonably comfortable to relocate. Our cost of living is pretty low here in Panama too but freelance work is rather unreliable.

capt_mahajan Jan 25th, 2009 20:55

All is negotiable, usually. I am assuming CTC annual too; in fact, I am betting on it.

I will leave the income tax question (German national etc) for somebody else because I don't know anything there, though I believe tax treaties etc may kick in.

An Indian resident would pay approximate taxes in this way, assuming permanent employment

CTC 10 lakhs
Investment and insurance premium deducatible allowed in specified instruments 1 lac (locked in for 3 years minimum)

That leaves 9 lacs
Income tax plus surcharges around 34 percent, say 2.5/ 3 lacs (its a slab system, but I am not doing exact calculations here)
Which leaves him 6 lacs or 50000 a month. Note this is approx and assuming permanent employment. A 'consultant' can deduct various expenses before paying tax.

Not enough for a good-ish apartment and an expat lifestyle, even a simple one, IMHO. Everything will come out of that 50k.
More than enough for a middle- middle class Indian lifestyle. I guess you can easily do that, but that usually does not involve 24 hour airconditioning or international schools etc.

I don't know Calcutta rentals, but that, and the international school, will take a big chunk out of earnings. What about transport?

Do browse the Calcutta sub forum if not already have. Suggest you take a good look at what lifestyle you want and what taxes you will have to pay before deciding.

indiaprof Jan 25th, 2009 21:50

Captain Mahajan,

What does CTC stand for?

capt_mahajan Jan 25th, 2009 21:52

Cost to Company. Normally indicates that there are no other perks at all- in fact, often standard deductions (as mentioned earlier) get taken out of this.

The only other perk at times may be some group medical insurance.

PEEK Jan 25th, 2009 22:14


I dont know your profession. So, i could not comment whether 10 lakh is ok or not.

But as captain said, it is not so much. CTC is a magic work, which will cheat you. It includes all the perks (like, medical allowance, Bonus, performance related bonus, leave travel allowance etc) and it varies company to company.

Depends on your salary structure, you may have to pay more taxes. I am not sure whether tax saving option will suit you or not. It has 3 years lockin period.

So, ask for cost split report and calculate your monthly take home salary. If possible, post your job nature and years of experience. Someone will come up with better suggestion.

Thekla924 Jan 26th, 2009 02:41

Yes, the CTC thing just seems to be really nice and simple for the company but full of pitfalls for the prospective employee. My husband is a Sr IT/Security professional with 10-15 years experience in the field. He's been freelance for quite a while and it is proving difficult to get back into the corporate job scene. This is one reason why we're somewhat more flexible in our expectations.

As for a 'decent' flat, doesn't have to be big but probably newer with a lift---I can't do stairs. Here, we use a/c on an as needed basis, supplemented with fans. We have split units so we don't need to cool the whole place. We also keep the thermostat set rather warm--25-26C, which helps with the electric bill. Electric is pretty expensive and unreliable here.

Does anyone know how one-time fees are handled in a CTC scenario? Like some relocation expenses, apartment deposit/commisions or possibly a one-time fee at a school? Do companies relocate an employee and then start counting the CTC? It seems that year one would be a killer.

capt_mahajan Jan 26th, 2009 09:09

The way it works is this

CTC is negotiated. Most companies then will let you break it up under different headings so that your income tax is minimised.

Relocation expenses are negotiated in addition. School fees and the other things you mention are normally your problem, although apartment deposit may be negotiable. However, depending on the market situation and expertise of the potential employee, it is not unheard of for companies to pay for education.

Most modern apartments will have lifts and a generator backup for the lift. Don't look at higher floors, though, since the lift may not work at times.

Electricity costs at Hyderabad levels for your kind of aircon use may be a 2/3000 rupees a month. Calcutta is cheaper, I think.

If you indicate which area of calcutta work is relocated other members may be able to give you realistic rentals, which can vary widely. Rentals are usually unfurnished.

And yes, year 1 can be a killer. Furnishing, car?, deposits, travel...

In your place, depending on how badly the company needs you, I would negotiate everything. I presume you know what Indian salaries would be like. I don't know about the IT area, but the CTC seems low.


So, ask for cost split report and calculate your monthly take home salary
Yes, also because some amount of tax may well be deducted at source by the company before they give you the rest.

Thekla924 Jan 26th, 2009 10:48

You guys are incredible! I feel so much not alone! This all really helps.

Do you know if water supply is a problem? I know the electric can be---generators are routine. Here, most people have some type of reserve water storage to bridge the frequent interruptions in service. We have 1200 gallon storage capacity, although currently we're down to 400-500 reserve. Is Kolkata another place with abundant rainfall that can't get the water to the taps?!

capt_mahajan Jan 26th, 2009 12:23

All big cities in India have a water and power problem- the extent varies.

The impact of this is minimised - or not- locally, by the use of apartment generators, buying water from tankers or decent storage facilities for water in apartment buildings.

Pockets in cities may be impacted more or less, depends on how high end your apartment is, whether business or VIP area or not etc.

Certain cities have greater problems, eg Chennai for water. Calcutta is not one of the worst, as far as I know, for either power (not any more) or water.

Thekla924 Jan 26th, 2009 13:17

So taking a shower or most importantly being able to flush the toilet ought not to be an issue. That was the one thing here that totally caught me off-guard. I expected electricity inconveniences but no water----for days, last year, it was even months---yikes! We had to use pool water to flush toilets.

But if the apartment complexes are prepared for these interuptions in Kolkata, then life might be easier! Actually, I've been reading a lot about rainwater harvesting on yahoo groups and there are several members in India.

nayan Jan 26th, 2009 13:55

Agree with everything captain mahajan has said.

just adding 2 points

1. A salary of 10 lakhs CTC anually is very low for an 10-15 years experienced IT professional. A 10 lakh CTC will be normal for a 5-8 years experienced Indian employee(median performance) in one of the big Indian IT companies(smaller, niche companies usually pay more but there is less job security).

2. Apartment complexes have their own water storage arrangements and back up generators(for 1-2 lights, fans per apartment). Kolkata is not known for extensive water problems. sometimes water supplies to an area gets disrupted due to pipe bursting/booster station failure etc. The reservoir water should be enough to get you through.

Nick-H Jan 26th, 2009 14:44

Thekla, it sounds as if life where you are now could be a good preparation for India and the surprises won't hit you too hard.

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