A CA decodes why Rs 20 LPA in a metro could be a financial illusion

In the eyes of many, a Rs 20 lakh per annum salary in India still carries the aura of “making it.” But peel back the layers, and the glitter quickly fades. Chartered Accountant Nitin Kaushik recently took to X (formerly Twitter) to break down the hard reality that a Rs 20 LPA CTC in a metro city doesn't translate to financial freedom—it barely keeps you afloat in the middle class.

Kaushik’s post dismantles the illusion around hefty CTC packages, revealing that after tax deductions, PF, and other components, the in-hand salary is around Rs 1.25 lakh per month. Sounds good on paper—until life starts billing you.

CA breaks it down
Rent alone for a decent 1–2 BHK in cities like Mumbai, Bangalore, or Delhi can eat up Rs 40,000. Add a basic car EMI at Rs 25,000, and daily living expenses such as groceries, utilities, and fuel at Rs 30,000. Subscriptions, occasional outings, and small emergencies tack on another Rs 10,000. That’s already Rs 1.05–Rs 1.10 lakh gone, before you’ve even tried saving or investing. What’s left? Maybe Rs 15,000–Rs 20,000, if you resist lifestyle inflation, he points out.

🚨 The Harsh Truth: ₹20 LPA in India = Just Middle Class, Not “Rich”

Let’s break the illusion of big CTCs:

💼 CTC Package: ₹20 LPA
💸 In-hand Salary: ~₹1.25L per month (after taxes, PF, gratuity etc.)

Now, let’s see where that money disappears:

🏠 Rent: ₹40K (Decent 1-2…

— CA Nitin Kaushik (@Finance_Bareek) July 10, 2025

Kaushik emphasises that Rs 20 LPA isn't poverty, but it’s also not the financial haven people imagine. The real trap lies in letting lifestyle expand with income. His advice: avoid unnecessary EMIs, build high-value skills to break income ceilings, and prioritise investing early.

In today’s urban India, your CTC might look like success, but your bank balance tells a different story. According to Nitin, the real game is all about keeping more and growing.