Old tax regime
The old regime exempts the lowest of three amounts: the HRA you received, rent minus 10% of salary, and 50% or 40% of salary for the city.
Finfod Research DeskUpdated 28 Oct 2026How we check
Exempt₹11,000 · Taxable ₹9,000
Use monthly figures in every box, or yearly figures in every box.
Include DA only if the job provides it. Commission is not added.
Rule 279 of the Income-tax Rules, 2026 names these eight places. Gurugram, Noida, Navi Mumbai and Thane are not in that list.
The lowest of the three limits. This is the amount the old regime can ignore.
HRA received minus the exempt amount.
Salary for this rule is ₹40,000.
The link keeps the numbers on this page.
Sources: Income-tax Act, 2025 (Schedule III and section 202) · Income-tax Rules, 2026, rule 279
Schedule III, table item 11 of the Income-tax Act, 2025 is the HRA exemption. It was Section 10(13A) and Rule 2A. Rule 279 of the Income-tax Rules, 2026 says you take the least of the HRA received, the rent paid minus 10% of salary, and 50% or 40% of salary.
Salary here means basic pay plus dearness allowance. The 50% places are Mumbai, Kolkata, Delhi, Chennai, Hyderabad, Pune, Ahmedabad and Bengaluru. Any other place is 40%.
Bengaluru, for one month. Basic pay ₹40,000, no dearness allowance, HRA ₹20,000, rent ₹15,000. Salary is ₹40,000. Half of that is ₹20,000. Rent minus 10% of salary is ₹11,000. The lowest figure is ₹11,000. That is the exempt amount. Taxable HRA is ₹9,000.
The same pay for a year: basic ₹4,80,000, HRA ₹2,40,000, rent ₹1,80,000. The exemption is ₹1,32,000.
This is an estimate for learning, not advice. Read the disclaimer.
No. Section 202(2)(a)(i) leaves out the HRA exemption in Schedule III, table item 11. Use the exempt figure only in the old regime.
Rule 279 names Mumbai, Kolkata, Delhi, Chennai, Hyderabad, Pune, Ahmedabad and Bengaluru. Every other place gets 40%. The rule uses the city name. It does not say the wider urban area.
Basic pay plus dearness allowance, if the job provides dearness allowance. Rule 279 does not add commission. The older Rule 2A did, when commission was a fixed share of turnover.
No. If basic pay is for a month, HRA and rent must be for that same month. If basic pay is for the year, the other boxes must be for the year.
Put the exempt amount into the income tax calculator. If you start from CTC, the in-hand salary calculator applies this rule for you.
Old and new regime tax for FY 2026-27, with the rebate, surcharge and 4% cess.
Which tax regime costs less for FY 2026-27 and FY 2025-26, including the ₹75,000 standard deduction.
CTC to monthly take-home after PF, gratuity, professional tax and income tax.
How house rent allowance is exempt in the old tax regime for FY 2026-27 (AY 2027-28): the three-way test, cities, rent receipts and the landlord PAN.
Which tax regime costs less in FY 2026-27 for salaries from ₹7 lakh to ₹30 lakh, with the breakeven old-regime deduction beside each salary.
Income tax slabs for FY 2026-27 (AY 2027-28) under section 202, with the section 156 rebate, marginal relief above ₹12 lakh, and the 4% cess.