HRA Exemption Calculator
Work out your exact HRA exemption before using this calculator.
Income Tax Calculator — Old vs New Regime
Enter your income and deductions once to see your tax liability under both regimes, side by side, with the full calculation shown.
📋 Your Details
All figures are annual amounts in rupees. Leave a field blank or zero if it doesn't apply to you.
📊 Your Results
Fill in your details and click Calculate to see your tax liability.
Your results will appear here once you calculate.
How We Calculated This
A plain-English walkthrough of every step, so you can verify the numbers yourself.
Calculate your tax above to see a personalized summary of how your taxable income and tax liability were derived.
1
Add up your total income
We start by adding your annual salary, bonus, and any other income (interest, rental, freelance, etc.) to get your Gross Total Income. This is the same starting point for both regimes.
Gross Total Income = Annual Salary + Bonus + Other Income
2
Subtract exemptions (Old Regime only)
If you receive House Rent Allowance and live in rented accommodation, the exempt portion of your HRA is deducted from your income before any other deduction. The New Regime does not allow this exemption.
Income after HRA = Gross Total Income − HRA Exemption
3
Apply the standard deduction
Every salaried individual gets a flat standard deduction — ₹75,000 under the New Regime, or ₹50,000 under the Old Regime — with no proof or investment required.
Income after deduction = Income after HRA − Standard Deduction
4
Subtract Chapter VI-A deductions (Old Regime only)
Section 80C (investments like PPF, ELSS, life insurance), Section 80D (health insurance), home loan interest under Section 24(b), professional tax, and any other eligible deductions are subtracted, each capped at its legal limit. None of these are available under the New Regime — this is the central trade-off between the two regimes.
Taxable Income = Income after deduction − (80C + 80D + Home Loan Interest + Other Deductions)
5
Apply slab rates progressively
Indian income tax is progressive — each slice of your income is taxed at the rate for that slab, not your entire income at the highest rate you reach. We calculate tax slab-by-slab for both regimes using the rates shown in the breakdown below.
6
Apply the Section 87A rebate and marginal relief
If your taxable income is at or below the rebate threshold (₹12,00,000 for New Regime, ₹5,00,000 for Old Regime), your entire tax liability is rebated to zero. Just above that threshold, marginal relief ensures your tax never increases by more than your income increased — avoiding a sudden jump.
7
Add surcharge (if applicable) and 4% cess
A surcharge applies only if your total income exceeds ₹50 lakh, at rates that increase with income. Finally, a 4% Health and Education Cess is added on top of tax plus surcharge — this applies to every taxpayer, regardless of income level.
Total Tax = Tax after Rebate + Surcharge + 4% Cess
Why is this calculation method used?
This mirrors exactly how the Income Tax Department's own utility and most chartered accountants compute salaried-individual tax: gross income → exemptions → standard deduction → Chapter VI-A deductions → slab-wise tax → rebate → surcharge → cess. We compute both regimes in parallel from the same income inputs so the comparison is apples-to-apples, rather than asking you to fill two separate forms.
Tax rules applied
We use the slab rates, standard deduction, and Section 87A rebate thresholds notified for FY 2025-26 (AY 2026-27) under the Income Tax Act, as amended by the Finance Act 2025. These rates have been retained unchanged for FY 2026-27 by Budget 2026. Surcharge rates and the 4% Health & Education Cess follow the same provisions. We do not currently model senior citizen slabs, NRIs, business income, or capital gains taxed at special rates.
Important assumptions
We assume you are a resident individual taxpayer below 60 years of age with income only from salary and the simple categories listed in the form. We assume any 80C, 80D, and home loan interest figures you enter are the amounts you're eligible to claim (we apply the legal caps automatically). We assume HRA exemption you enter is already the final exempt figure — if you need help computing that, see our HRA calculator. This tool does not account for TDS already deducted, advance tax paid, or refunds — it estimates your total annual liability, not your balance payable.
This is an estimate, not tax advice.
TaxNova's calculators are built for general planning purposes using the published Income Tax Act rules for FY 2025-26 (AY 2026-27). Your actual tax liability may differ based on factors this calculator does not model, such as capital gains, business income, or TDS already deducted. Please consult a qualified chartered accountant before filing your return.
Tax Rules Reference
- Income Tax Department of India — official site
- Finance Act 2025 — New Regime slab and rebate revisions
- Section 87A — rebate provisions for resident individuals
- Section 24(b) — home loan interest deduction rules
Frequently Asked Questions
Common questions about choosing between the Old and New tax regime.
Which tax regime should I choose, Old or New?
It depends on how many deductions you can claim. If your HRA exemption, Section 80C investments, Section 80D health insurance, and home loan interest add up to a large amount, the Old Regime often results in lower tax. If you have few deductions, the New Regime's lower slab rates and higher basic exemption usually result in lower tax. This calculator computes both and tells you which one is cheaper for your numbers.
Is income up to ₹12 lakh really tax-free under the New Regime?
Yes, for FY 2025-26. Under the New Regime, taxable income up to ₹12,00,000 is effectively tax-free because the Section 87A rebate of up to ₹60,000 cancels out the tax payable. For a salaried person, the ₹75,000 standard deduction is applied first, so a gross salary up to roughly ₹12,75,000 can result in zero tax.
Can I switch between the Old and New tax regime every year?
Salaried individuals without business income can choose between the Old and New regime afresh every financial year when filing their return. Individuals with business or professional income face restrictions and can switch back to the Old Regime only once in their lifetime after opting out.
What deductions are not allowed under the New Tax Regime?
Under the New Regime, you cannot claim HRA exemption, Section 80C (PPF, ELSS, life insurance, etc.), Section 80D health insurance premiums, or interest on a home loan for a self-occupied property. The main deductions still allowed are the standard deduction and the employer's contribution to NPS under Section 80CCD(2).
How is HRA exemption calculated under the Old Regime?
HRA exemption is the lowest of three amounts: the actual HRA received from your employer, rent paid minus 10% of basic salary, or 50% of basic salary (for metro cities) or 40% of basic salary (for non-metro cities). This calculator asks for your already-computed HRA exemption amount directly.