India’s largest IT services company, Tata Consultancy Services (TCS), has rolled out an average salary hike of around 5% during its latest appraisal cycle. However, several employees have alleged that their actual take-home salaries and annual compensation packages have declined due to restructuring in salary components and reduced variable payouts.
The latest development has triggered widespread discussion across India’s IT sector, especially at a time when companies are facing pressure from weak global demand, delayed client spending decisions, and rising margin concerns.
TCS Salary Hike 2026: Top Performers Get Up to 13% Increment
According to reports, employees placed in the highest-performing A+ category received salary hikes ranging between 9% and 13%. Workers in the A band reportedly got increments between 5% and 9%.
Meanwhile, employees in the B category received significantly lower hikes ranging from 1% to 3.5%, while several employees in the C band claimed their salary revisions were either minimal or negative.
Reports suggest the average salary increase distribution was:
- A+ Band: Around 10%
- A Band: More than 7%
- B Band: Around 3%
- C Band: Just 0.3%
TCS follows a performance-based appraisal system where employees are categorized into A+, A, B, and C bands during annual reviews.
Employees Claim Salary Reduced After Appraisal
Despite receiving increment letters, multiple employees reportedly claimed that their revised compensation had actually fallen.
One employee allegedly stated that annual CTC reduced by ₹1,000 to ₹10,000 after appraisal calculations. Another employee claimed their monthly salary decreased by nearly ₹3,000 despite receiving a hike.
Several workers also pointed toward changes in compensation structures, allowances, and payout calculations as the primary reason behind the decline in take-home salaries.
Variable Pay and Work-From-Office Metrics Under Scanner
Employees further alleged that monthly variable pay components were either sharply reduced or shifted to quarterly and annual payout systems.
Some workers claimed that performance bonuses are now linked to work-from-office (WFO) compliance, meaning attendance at office locations may directly impact variable compensation.
The reported changes have raised concerns among employees who expected better payouts after the appraisal cycle.
Salary Restructuring Creates Concerns
Another major concern among TCS employees is the restructuring of salary components. Reports suggest gratuity may no longer be prominently reflected in displayed CTC calculations, potentially affecting compensation comparisons during future job switches.
Employees also flagged:
- Higher mediclaim deductions
- Changes in HRA structure
- Reduced personal allowances
- Lower visible annual CTC figures
Industry experts believe such restructuring methods are increasingly being adopted by IT firms to control costs while maintaining headline salary hike numbers.
TCS Headcount Crosses 5.84 Lakh Employees
Tata Consultancy Services currently employs around 5,84,519 people globally, making it one of India’s largest private-sector employers.
The company had earlier announced annual salary hikes averaging between 4.5% and 7% for junior and mid-level employees, while top performers were promised double-digit increments.
Reports also suggest that TCS may have introduced a new A+ performance category this year, widening the compensation gap between top performers and lower-rated employees.
IT Sector Faces Ongoing Pressure
The controversy surrounding the TCS Salary Hike 2026 comes during a challenging period for India’s IT industry. Major technology companies continue to face slower global tech spending, cautious client budgets, and pressure on operating margins.
As companies focus on profitability and cost optimization, employees across the sector are closely watching salary revisions, variable payouts, and performance-linked compensation policies.
