Tata Consultancy Services (TCS), India’s largest IT services exporter, has stepped forward to clarify its newly updated compensation framework.
The statement follows widespread concern among employees who reported seeing a drop in their total Cost-to-Company (CTC) figures and performance bands immediately after receiving their annual appraisal letters for the 2025–26 fiscal year.
The Root of Concern: Missing Gratuity and Lower CTCs
The tech giant officially rolled out its annual salary increments on Monday, May 18, 2026, granting an average pay hike of 5% to 8%.
Top performers in the A+ band secured raises between 9% and 13%, while those in the B band received a modest 1% to 3.5%.
Despite the announced raises, thousands of employees voiced their frustrations on internal forums and social media.
Many alleged that their gross annual CTC figures had unexpectedly shrunken by ₹1,000 to ₹10,000, raising intense anxieties regarding diminished take-home pay and weakened leverage for future job transitions.
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TCS Response: Compliance with New Labour Codes
Responding swiftly to the backlash, a TCS spokesperson firmly denied any reduction in net or gross employee earnings, stating that “take-home salaries remain fully protected.”
The company clarified that the perceived drop in CTC stems from a restructuring exercise mandated by India’s upcoming Labour Codes, specifically the Code on Social Security, 2020.
Under the new legal framework, TCS has removed the gratuity component from the displayed annual CTC letter.
Furthermore, components like basic pay, city allowance, and personal allowance have been consolidated under a broader definition of “wages,” while house rent allowance (HRA) and provident fund (PF) remain excluded.
Long-Term Benefits Protected
Management emphasized that the restructuring aims to standardize wage structures and ensure absolute legal compliance.
Because the new code calculates gratuity on a broader wage base rather than just basic salary, long-term employee accruals are projected to actually increase.
TCS noted that employees will receive whichever payout is higher between the traditional TCS Gratuity Scheme and the updated statutory framework, with the true enhanced values reflecting in June 2026 payslips.
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About the Author
Sahiba Sharma
Contributing Writer