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If you own a property and rent it out, there is a deduction worth 30% of that rental income sitting in the law, and you get it whether or not you spend a single rupee on the property. You do not need receipts. You do not need to have painted anything. It is flat, automatic and unconditional.

Plenty of landlords never claim it. Plenty of others claim it against the wrong number and quietly lose a few thousand rupees a year. And from April 2026 there is a third problem: the section number everyone has memorised no longer exists.

First, the thing that changed in April 2026

The Income Tax Act, 1961 was repealed on 1 April 2026 and replaced by the Income Tax Act, 2025. FY 2026-27 is the first year filed under the new Act.

Nothing about how rental income is taxed has been gutted. The 30% is still 30%. But the numbering has changed completely, and almost every article, spreadsheet and YouTube explainer still says “Section 24”. Here is the map:

What it does	Old (1961 Act)	New (2025 Act)
Taxes income from house property	s.22	s.20
Annual value, municipal taxes	s.23	s.21
30% standard deduction	s.24(a)	s.22(1)(a)
Interest on borrowed capital	s.24(b)	s.22(1)(b)
Pre-construction interest, in fifths	proviso to s.24(b)	s.22(1)(c)
₹2 lakh cap, self-occupied	s.24(b) provisos	s.22(2)
Loss set off against salary, ₹2L cap	s.71(3A)	s.109
Carry forward, 8 years	s.71B	s.110
Default (new) regime	s.115BAC	s.202

One more piece of vocabulary: “previous year” and “assessment year” are gone. There is now a single tax year that matches the financial year. FY 2026-27 is simply tax year 2026-27.

How rental income is actually taxed

Four steps, in this order. The order is the whole point.

1. Gross annual value. Broadly, the rent you receive for the year — or the property’s reasonable letting value if that is higher.
2. Less municipal taxes actually paid by you during the year. This gives the annual value (s.21).
3. Less 30% of that annual value (s.22(1)(a)).
4. Less the full interest on any loan taken for the property (s.22(1)(b)).

What is left is your income from house property, and it gets added to your other income and taxed at your slab rate.

The four misses

Miss 1: not claiming the 30% at all

This is the expensive one, and it is more common than you would think — particularly among people with one flat let out, who declare the rent honestly and stop there.

On rent of ₹35,000 a month, the 30% is worth roughly ₹1.22 lakh of deduction. In the 20% bracket that is about ₹24,500 of tax. Every year. For doing nothing.

Miss 2: applying the 30% to gross rent

The 30% is calculated on the annual value — that is, after municipal taxes come off. Take 30% of the gross rent instead and your arithmetic is wrong in both directions at once: you have inflated the 30% slightly and skipped the municipal tax deduction entirely. The net effect is usually that you overstate your income.

Miss 3: paying municipal tax the wrong way

Municipal tax is deductible only if it was actually paid, by you, the owner, during the year. Three traps follow from that single sentence:

• If your tenant pays the property tax directly, you get no deduction for it.
• If the bill was raised but you have not paid it by 31 March, you get no deduction this year.
• Accrued-but-unpaid does not count, no matter how honestly it is recorded.

If you were going to pay it in April anyway, paying it in March is free money.

Miss 4: thinking the 30% covers your loan interest

It does not. Interest is a separate deduction, on top of the 30%, and for a let-out property there is no cap on it. The ₹2 lakh ceiling everyone quotes applies to a self-occupied home, not to one you rent out.

The flip side, and the reason the 30% is such a good deal: it is a flat allowance for repairs and maintenance regardless of what you actually spent. Spend nothing, still get 30%. But you also cannot claim your actual repair bills on top of it. It is one or the other, and the law has already chosen for you.

A worked example

A flat let at ₹35,000 a month, municipal tax of ₹12,000 paid by the owner in February, no home loan.

Gross annual value (₹35,000 × 12)	₹4,20,000
Less municipal tax paid	(₹12,000)
Annual value	₹4,08,000
Less 30% standard deduction	(₹1,22,400)
Income from house property	₹2,85,600

The landlord who declares ₹4,20,000 and claims nothing is offering up an extra ₹1,34,400 of income. In the 20% bracket that is about ₹26,900 of tax paid for no reason.

When there is a loan: the loss, and where the regimes split

Same flat, now let at ₹50,000 a month, municipal tax ₹18,000, and a home loan on which ₹5,20,000 of interest was paid.

Gross annual value	₹6,00,000
Less municipal tax	(₹18,000)
Annual value	₹5,82,000
Less 30%	(₹1,74,600)
Less interest (no cap, let-out)	(₹5,20,000)
Loss from house property	(₹1,12,600)

Now it matters a great deal which regime you are on.

Old regime. That ₹1,12,600 loss can be set off against your salary, up to a ceiling of ₹2,00,000 a year (s.109). For someone in the 30% bracket, that is about ₹33,800 of tax saved.

Default (new) regime. You still get the 30%. You still get the full interest. But the resulting loss cannot be set off against your salary or any other head. The deduction exists on paper and does nothing for you this year.

If the loss is bigger than the ₹2 lakh cap — say interest of ₹8,00,000 produces a loss of ₹3,92,600 — then ₹2,00,000 is set off this year and the remaining ₹1,92,600 is carried forward for up to eight tax years under s.110, to be used only against future house property income.

One honest caveat: whether an unabsorbed let-out loss can be carried forward while you are on the default regime is genuinely disputed among practitioners, and the position is not as settled as the confident blog posts suggest. If your loss is large enough for this to matter, it is worth a specific conversation with your CA rather than a rule of thumb.

The bit your tenant is supposed to handle

If the monthly rent crosses ₹50,000, TDS enters the picture — and it is the tenant’s obligation, not yours.

• An individual or HUF tenant paying more than ₹50,000 a month deducts 2%, once a year, usually in March or when the tenancy ends. (The rate was cut from 5% to 2% in October 2024 — a lot of tenants have not noticed.)
• A company or firm as tenant deducts 10%, once the annual rent crosses ₹6,00,000. That threshold was raised from ₹2.4 lakh in April 2025, which quietly took a lot of smaller commercial tenancies out of TDS entirely.

Either way the deducted amount is your tax, paid in advance. Check it appears in your Form 26AS or AIS, and claim credit for it when you file. Rent received net of TDS is still taxed on the gross figure.

What to actually do

1. Pay the municipal tax yourself, before 31 March. It is the only part of this calculation you can still influence at year-end.
2. Compute in the right order — municipal tax first, then 30%, then interest. Getting the order wrong is what produces the small, silent overpayments.
3. If you have a loan on a let-out property, compare regimes before you file. A house property loss is one of the few remaining reasons the old regime can still beat the default one.
4. Reconcile the TDS. If your tenant deducted, it should be visible in your AIS. If it is not, chase it before filing, not after.
5. Stop quoting Section 24. For FY 2026-27 onward it is Section 22. It will matter the first time you have to correspond with the department about it.

Related calculators

• Rental Yield Calculator — what the property actually returns before tax
• TDS Calculator — check what your tenant should be deducting
• Old vs New Tax Regime Comparator — the comparison that decides whether your loss is worth anything
• Property Tax Calculator — the municipal tax that comes off before the 30%
• Income Tax Calculator — slab tax on the final figure

Applies to FY 2026-27 (tax year 2026-27), the first year under the Income Tax Act, 2025. Figures are illustrative and rounded; your own numbers will differ. General information, not personalised tax advice — for a large carried-forward loss, a co-owned property or anything involving an NRI landlord, speak to a chartered accountant.

The due date for filing your return for FY 2025-26 (assessment year 2026-27) was 31 July 2026. If you missed it, you can still file a belated return under Section 139(4) up to 31 December 2026. You should do it now rather than in December, and the reason is not just the fee.

There are three costs. Two are obvious and small. The third is the one nobody warns you about, and it can be far larger than the other two combined.

Cost 1: the late filing fee (Section 234F)

Your total income	Fee
Up to ₹5 lakh	₹1,000
Above ₹5 lakh	₹5,000

Flat, one-time, and payable whether or not you owe any tax. Filing on 1 August and filing on 30 December cost the same fee.

Cost 2: interest on unpaid tax (Section 234A)

1% per month, or part of a month, on any tax still outstanding, running from the day after the due date until you file. Note the phrase part of a month — there is no pro-rating. Filing on 1 September rather than 31 August costs a full extra month of interest.

If your tax was fully covered by TDS and you owe nothing, this is zero. If you owe, it compounds your delay directly. Work out what you actually owe with the Income Tax Calculator, and if you have non-salary income, check whether advance tax was due with the Advance Tax Calculator — Sections 234B and 234C add separate interest for shortfalls there.

Cost 3: you lose the old regime — permanently, for that year

This is the expensive one, and it surprises people.

The new regime has been the default since AY 2024-25. Choosing the old regime is an opt-out, and the opt-out is only valid if it is exercised on or before the Section 139(1) due date:

• Salary and other non-business income (ITR-1, ITR-2): you choose in the return itself — but the return has to be on time.
• Business or professional income (ITR-3, ITR-4): you must file Form 10-IEA on or before the due date.

Either way, a belated return can only be filed under the new regime. Filing Form 10-IEA late does not help. Filing a revised return afterwards does not restore the choice. Switching to ITR-3 does not create a loophole — the timeliness condition sits in Section 115BAC itself, not in the form you pick.

But here is the honest part: for most people this costs nothing

The new regime got considerably more generous. A ₹75,000 standard deduction, and a Section 87A rebate that takes tax to zero on taxable income up to ₹12 lakh. For a large majority of salaried filers it now wins outright, so being locked into it is not a loss at all.

Take someone on ₹18 lakh with a fairly typical deduction set — ₹2.4 lakh HRA, ₹1.5 lakh under 80C, ₹25,000 under 80D, ₹2 lakh of home loan interest:

Regime	Approximate tax
Old regime, with all those deductions	₹1,59,000
New regime, standard deduction only	₹1,51,000

The new regime is cheaper. This person lost nothing by filing late except the fee.

Who does get hurt

The lock-out bites when your deductions are genuinely large. Same ₹18 lakh salary, but a metro renter with ₹4 lakh of HRA exemption, ₹1.5 lakh 80C, ₹50,000 80D and ₹2 lakh home loan interest — roughly ₹8 lakh of deductions in total:

Regime	Approximate tax
Old regime	₹1,07,000
New regime (forced)	₹1,51,000

That is roughly ₹44,000 — about nine times the ₹5,000 fee. As a rough rule of thumb, at this income level you need somewhere north of ₹7-8 lakh of total deductions before the old regime pulls ahead, and that generally means high metro rent plus a home loan plus a full 80C.

Run your own numbers both ways with the Old vs New Tax Regime Comparator before assuming either way. The crossover shifts with your income and your specific deductions.

One more consequence: carried-forward losses

File late and you lose the right to carry forward business losses and capital losses to future years. If you had a bad year in equities or your business made a loss, that is a real cost that shows up years later when you cannot set it off against a gain. Loss from house property is the exception — that carry-forward survives a belated return.

What to actually do

1. File this week, not in December. The 234F fee is fixed, but 234A interest is per month or part of a month. Every calendar month you wait adds 1% of your outstanding tax for no benefit whatsoever.
2. Recompute under the new regime before you file. If you had been planning around old-regime deductions, your actual liability is different from what you expected.
3. Pay the self-assessment tax first, then file. Interest runs until the tax is paid, not until the return is submitted.
4. For next year, file Form 10-IEA on time if you have business income and want the old regime. It takes a few minutes and it is the whole ball game.

And if you are past 31 December, the belated window closes too. After that the only route is an updated return under Section 139(8A), which carries additional tax on top — a considerably worse position than a ₹5,000 fee.

Related calculators

• Old vs New Tax Regime Comparator — see which regime actually costs you less
• Income Tax Calculator — work out what you owe
• Advance Tax Calculator — check for 234B/234C interest on non-salary income

Applies to FY 2025-26 (AY 2026-27): due date 31 July 2026 for non-audit cases, belated return window to 31 December 2026. Tax figures are illustrative and rounded; your own numbers will differ. General information, not personalised tax advice — for a large loss carry-forward or a complex case, speak to a chartered accountant.

Most people, asked how much they save, name the number they consciously set aside. The SIP. The recurring deposit. Whatever is left at the end of the month. Almost nobody counts the money that never touched their bank account — the provident fund deduction on the payslip, and the matching contribution the employer makes that doesn’t even appear in the gross figure.

That habit understates your real savings rate, sometimes by a third. Here is how to work out the honest number, and the one place where counting PF as savings will get you into genuine trouble.

The number most people miss

Take someone on ₹1,00,000 a month, with a basic of ₹50,000. A fairly ordinary payslip:

Component	Monthly
Gross salary	₹1,00,000
Employee EPF (12% of basic)	−₹6,000
VPF (voluntary top-up)	−₹3,000
Professional tax	−₹200
In hand	₹90,800
Employer contribution (12% of basic, never in your gross)	₹6,000

The employer’s ₹6,000 splits in a way that matters later: ₹1,250 goes to the pension scheme (EPS — 8.33% of the ₹15,000 statutory ceiling) and the remaining ₹4,750 into the EPF account itself. So ₹13,750 a month lands in the provident fund and ₹1,250 in the pension scheme. Call it ₹1.65 lakh a year into EPF that this person never sees, on top of anything they deliberately invest.

Now say they also run a ₹20,000 SIP. Ask them their savings rate and they will say 22% — ₹20,000 out of ₹90,800 in hand.

The honest figure: ₹20,000 plus ₹13,750 plus ₹1,250, against a total compensation of ₹1,06,000. That is 33%. Exclude the pension slice for reasons we’ll get to and it is still about 32%.

Same person, same month, same behaviour. A ten-point difference purely in how it was counted.

The trap: don’t mix your denominators

This is where most attempts at the calculation quietly go wrong. You have to be consistent about which income figure you’re dividing by.

• If you divide by in-hand pay, your own EPF and VPF have already been deducted — they are not in the denominator, so adding them to the numerator inflates the result. You’d have to add them back to both sides.
• If you divide by gross, your own contributions are included, so count them. But the employer’s contribution isn’t in gross at all, so it has to go into both numerator and denominator.

The cleanest version, and the one used above: total money saved divided by total compensation, where total compensation is gross plus the employer’s contribution. It’s the only version that doesn’t double-count or silently drop anything. Use the Net Salary Calculator to pull the exact figures off your own structure first — the calculation is only as good as the basic-pay number you feed it.

The part that is not savings

Here’s a correction almost nobody makes: the EPS portion is not a balance you will ever get back as a lump sum.

That ₹1,250 a month buys a pension, not a pot. With ten or more years of service you get a monthly pension from 58 — a modest one, since it’s calculated on the ₹15,000 ceiling rather than your actual salary. With less than ten years, you can take a small withdrawal benefit instead. Either way, if you are adding up your net worth, the EPS contributions should not appear as an asset the way your EPF balance does.

So the precise answer to “does PF count as savings” is: the EPF part, yes, at its actual balance. The EPS part is a pension entitlement, which is valuable but is not a number you can put in a net worth spreadsheet. Track the rest properly with the Net Worth Calculator.

The liquidity objection — and what changed in June 2026

The standard pushback is that PF is locked, so counting it flatters your position. That was a stronger argument a year ago than it is now.

Under the EPF Scheme 2026, effective 29 June 2026, the withdrawal rules were substantially loosened. The thirteen separate withdrawal categories were consolidated into five, the minimum service requirement was made a uniform 12 months for all partial withdrawals (it used to be three years for some purposes, five for housing, seven for education and marriage), and members can now access up to 75% of the balance, with 25% required to stay in the account and keep earning 8.25%. On job loss, 75% is available immediately, with the remaining 25% after twelve months of unemployment.

So PF is meaningfully less locked than the conventional wisdom assumes. It is still not liquid in the sense that matters in a crisis — a claim takes days to process, you cannot get the last 25% on demand, and the whole point of the 25% floor is that you can’t empty it.

Where this genuinely goes wrong

The failure mode is specific and it is expensive: treating the PF balance as your emergency fund.

Someone with ₹8 lakh in EPF feels well-cushioned, skips building a cash buffer, hits an unexpected bill, and puts it on a credit card at 3–3.5% a month — over 40% annualised — because the card is instant and the PF claim is not. That is the trade being made, whether or not it is ever framed that way.

Counting PF as savings is correct. Counting it as accessible savings is what does the damage. Keep them as two separate lines: what you own, and what you could reach tomorrow morning. A cash buffer covering three to six months of expenses does a job the PF balance cannot do, no matter how large it gets.

What to actually do with this

1. Pull your basic pay and PF deduction off a real payslip and work out the monthly total — yours plus the employer’s. The EPF Calculator will also project what that compounds to by 58.
2. Recalculate your savings rate as total saved over total compensation. Most people find they are five to twelve points higher than they thought.
3. Log the EPF balance as an asset in your net worth, tagged as long-term. Leave the EPS out of the asset column.
4. Keep the emergency fund entirely separate, in cash. The PF balance is not a substitute, and the 2026 rule change does not make it one.

The point of the exercise isn’t a bigger number to feel good about. It’s that people who think they are saving 22% often conclude they need to push harder and end up over-correcting into an unsustainable budget — when they were at 33% all along and the real gap was liquidity, not discipline.

Related calculators

• EPF Calculator — project your provident fund balance to retirement
• Net Salary / Take-Home Pay Calculator — get the basic-pay and deduction figures this calculation needs
• Net Worth Calculator — put the EPF balance in its proper place

EPF interest is 8.25% for FY 2025-26. Withdrawal rules reflect the EPF Scheme 2026, effective 29 June 2026. The EPS wage ceiling remains ₹15,000; the proposed increase to ₹25,000 has been approved but not yet notified. General information, not personalised financial advice.

Your first salary is the only one you will ever get to allocate from a blank slate. No EMI, no rent (if you are at home), no habits to unlearn. What you do in the first three months tends to stick for the next ten years — which is why it is worth being slightly deliberate about it instead of letting the money quietly disappear into the month.

This is a plan for a specific, very common situation: ₹46,000 in hand each month, living with parents, roughly ₹16,000 a month of fixed outgoings. That leaves ₹30,000. Here is where it should go, in what order, and why the order matters more than the amounts.

Step 0: Find out what your salary actually is

Before allocating anything, get clear on the difference between the three numbers on your offer letter. A ₹6.2 LPA CTC does not mean ₹51,600 a month. A realistic breakdown behind ₹46,000 in hand looks like this:

Component	Monthly
Gross salary	₹49,000
Basic (40% of gross)	₹20,000
Less: your EPF contribution (12% of basic)	−₹2,400
Less: professional tax	−₹200
Less: your share of group health cover	−₹400
In hand	₹46,000
Employer’s EPF/EPS contribution (not in your gross)	₹2,400
Effective CTC	≈ ₹6.2 lakh a year

Run your own offer letter through the Net Salary / Take-Home Pay Calculator before you plan around a number — the gap between CTC and in-hand is usually 15–20%, and almost every fresher budget that falls apart in month two fell apart here.

Step 1: Emergency fund — ₹1 lakh, before anything else

The standard advice is six months of expenses. Living with your parents, your true monthly outgo is the ₹16,000 you actually spend, so six months is roughly ₹96,000 — call it ₹1 lakh. Put ₹15,000 a month towards it and you are done in about seven months.

Two honest caveats. First, ₹1 lakh is the floor, not the target — the day you move out and start paying ₹18,000 rent, your six-month number roughly doubles overnight, so revisit it then. Second, this money is not an investment. It should sit in a liquid fund or a sweep-in FD, where you can get it out in a day and where a 6–7% return is fine. Do not put it in equity because equity returns more; the entire point of this money is that its value is knowable on the day you need it, which is usually the worst possible day to be selling stocks.

The Emergency Fund Calculator will size this against your own expenses rather than this example’s.

Step 2: Term life insurance — but only if someone depends on you

This is the step most first-salary articles get wrong in both directions. If you are 23, unmarried, and nobody is financially dependent on your income, you do not need life insurance yet. Life insurance replaces income that someone else was relying on. If nobody is relying on it, there is nothing to replace.

But if your parents’ household actually depends on what you send home — which is true for a lot of people reading this — buy it now, because premiums are priced off your age at purchase and never re-rated upward. A healthy 25-year-old non-smoker can get ₹1 crore of cover to age 60 for roughly ₹600 a month. The same policy bought at 35 costs meaningfully more, every year, for the rest of the term. Buying early is one of the few genuinely free wins in personal finance. (Individual life insurance premiums have attracted no GST since September 2025, so the quoted premium is what you pay.)

Buy plain term cover. Not ULIPs, not endowment, not “money-back”. If a plan promises to return your premium at the end, you are paying extra for that promise.

Step 3: SIP the rest — around ₹25,000 a month

Once the emergency fund is full and term cover is in place, the ₹30,000 of headroom minus ₹600 of premium leaves you about ₹29,000. Investing ₹25,000 of it and keeping ₹4,000 as genuine discretionary spending is a plan you will actually stick to, which beats a ₹29,000 plan you abandon in March.

What ₹25,000 a month compounds into, at a 12% assumed return:

You invest for	You put in	Approximate corpus
10 years	₹30 lakh	₹58 lakh
20 years	₹60 lakh	₹2.5 crore
25 years	₹75 lakh	₹4.7 crore

Read the last two rows against each other. Five extra years of the same contribution roughly doubles the outcome. That asymmetry is the entire argument for starting at 23 instead of 30, and it is why this step sits at number three rather than number one — the five years are only yours to keep if an emergency never forces you to sell.

Two things to be honest about. That 12% is an assumption, not a promise; equity returns are lumpy and there will be years where your portfolio is worth less than what you put into it. And ₹4.7 crore in 25 years is a nominal number — at 6% inflation it buys roughly what ₹1.1 crore buys today. Still an excellent outcome. Just not the one the headline number implies. Model your own numbers with the SIP Calculator.

The two mistakes people make at this stage

1. Not knowing whether the number you were told is before or after EPF

“I make ₹50,000” can mean a ₹50,000 CTC, a ₹50,000 gross, or ₹50,000 landing in your account — three quite different lives. Budget against the third one only.

The flip side is worth knowing too: the EPF you never see is real money. On a ₹20,000 basic, ₹2,400 leaves your salary and the employer adds ₹2,400 — of which ₹1,250 goes to the pension scheme (EPS) and the remaining ₹1,150 to your EPF. So about ₹3,550 lands in your provident fund every month, earning 8.25% for FY 2025-26, tax-free. You are already saving more than you think. (Note that the statutory wage ceiling for EPS is still ₹15,000 — a proposal to raise it to ₹25,000 has been approved by the Finance Ministry but is not yet notified, so nothing has changed for your payslip today.) The EPF Calculator will project what that grows to.

2. Treating 80C as a tax strategy when you owe no tax

This is the expensive one. Every relative will tell you to “save tax under 80C”. Check whether you owe any tax first.

On a ₹5.88 lakh annual gross, the new regime gives you a ₹75,000 standard deduction, taking taxable income to ₹5.13 lakh. That is comfortably under the ₹12 lakh threshold where the Section 87A rebate of up to ₹60,000 applies — so your tax is zero. Not reduced. Zero, with no investment required, no lock-in, no paperwork.

Under the old regime the same salary would leave ₹5.38 lakh taxable after the ₹50,000 standard deduction, and the old regime’s 87A rebate only runs to ₹5 lakh — so you would owe roughly ₹20,900. You could get that to zero by putting about ₹38,000 into 80C instruments. But look at what that costs: you would be locking money into a PPF or ELSS to buy a benefit the new regime hands you for free.

Invest in PPF or ELSS if they suit your goals. Just do not buy them believing they are saving you tax, when at this income they are not.

Your first three months, in order

Month	Do this
1	Confirm your real in-hand figure and EPF deduction from an actual payslip, not the offer letter. Open a separate savings account for the emergency fund.
1–7	₹15,000/month into a liquid fund or sweep-in FD until it reaches ₹1 lakh.
2	If anyone depends on your income, buy term cover — roughly ₹600/month at 25. Check whether your employer’s health cover extends to your parents; if not, price a separate family floater.
8 onwards	Redirect the ₹15,000 into SIPs, taking you to about ₹25,000 a month invested. Automate it for the day after payday.

Set the SIP date to the day after your salary credits. Money that leaves the account before you look at it is the only budgeting technique that reliably survives contact with real life.

Related calculators

• Net Salary / Take-Home Pay Calculator — what your CTC actually pays you each month
• Emergency Fund Calculator — size your six-month buffer
• SIP Calculator — project what a monthly SIP grows into
• EPF Calculator — the retirement savings already happening in the background

Figures reflect FY 2026-27 rules: a ₹75,000 standard deduction and a Section 87A rebate of up to ₹60,000 on taxable income up to ₹12 lakh under the new regime, and an EPF interest rate of 8.25% for FY 2025-26. This is general information, not personalised financial advice.

For over two decades, only four cities in India qualified for the 50% HRA exemption rate: Delhi, Mumbai, Kolkata, and Chennai. Every other city — including Bengaluru, Hyderabad, Pune, and Ahmedabad — was stuck at the 40% non-metro rate, regardless of how expensive rent actually was there. From FY 2026-27, that changes. Under the updated Income Tax Rules, those four cities now qualify for the 50% metro rate too, alongside the original four. If you’re a salaried employee paying rent in one of these eight cities, this is worth five minutes to understand before your next HRA declaration.

How HRA exemption is actually calculated

House Rent Allowance exemption under Section 10(13A) is the lowest of three numbers:

1. Actual HRA received from your employer
2. Rent paid minus 10% of basic salary
3. 50% of basic salary (metro) or 40% of basic salary (non-metro)

Whichever of these three is smallest is what you get to exclude from taxable income. This only matters if you’ve opted for the old tax regime — HRA exemption isn’t available under the new regime at all, regardless of which city you live in.

The eight metro cities from FY 2026-27

City	Rate	Since
Delhi	50%	Always
Mumbai	50%	Always
Kolkata	50%	Always
Chennai	50%	Always
Bengaluru	50%	FY 2026-27
Hyderabad	50%	FY 2026-27
Pune	50%	FY 2026-27
Ahmedabad	50%	FY 2026-27
Everywhere else	40%	—

Does this actually mean a bigger exemption for you?

Not automatically — and this is the part people get wrong. Since your exemption is the minimum of the three conditions, the higher 50% ceiling only helps if condition 3 was the one holding you back in the first place. If your actual HRA received, or rent paid minus 10% of basic, was already lower than 40% of your basic salary, moving to 50% changes nothing — you were never going to hit that ceiling anyway.

Where it does make a real difference: employees with a high basic salary relative to rent, or anyone whose rent paid minus 10% of basic already exceeded the old 40% cap. A software engineer in Bengaluru on ₹1,00,000/month basic, paying ₹50,000/month rent, would have been capped at 40% of basic (₹4,80,000/year) under the old rule — now the cap rises to 50% (₹6,00,000/year), which happens to match the rent-based condition exactly in this case, unlocking a meaningfully bigger exemption.

The only way to know which condition binds for your specific numbers is to run them.

One important gotcha: which financial year are you filing for?

This trips people up every year around July. If you’re filing your ITR for FY 2025-26 (due July 31, 2026), the old four-city rule still applies — Bengaluru, Hyderabad, Pune, and Ahmedabad are non-metro for that return. The eight-city rule only applies starting FY 2026-27, the year currently underway. Don’t apply this year’s rule to last year’s return.

Run your own numbers

The HRA Exemption Calculator has been updated with the new eight-city metro list for FY 2026-27. Plug in your basic salary, HRA received, and rent paid, and it’ll tell you exactly which of the three conditions is binding and what your exempt amount comes out to.

A couple of related calculators worth checking alongside this:

• Old vs New Regime Comparator — since HRA only matters under the old regime, this tells you whether claiming it is even worth it once you weigh it against the new regime’s lower slabs.
• Net Salary (In-Hand) Calculator — see your actual take-home pay once tax, HRA exemption, and other deductions are factored in.

Frequently asked questions

Which cities count as metro for HRA exemption now?
Eight, from FY 2026-27: Delhi, Mumbai, Kolkata, Chennai (unchanged), plus Bengaluru, Hyderabad, Pune, and Ahmedabad (new). Every other city uses the 40% non-metro rate.

Will I automatically get a bigger exemption if I live in one of the four new cities?
Only if the 50%-of-basic condition was the one limiting your exemption. If your actual HRA or rent-based condition was already lower, nothing changes for you.

Does this apply to my FY 2025-26 return, which I’m filing right now?
No. FY 2025-26 returns still use the old four-city rule. The eight-city rule applies from FY 2026-27 onward.

Can I claim HRA exemption under the new tax regime?
No — HRA exemption under Section 10(13A) is only available if you’ve opted for the old regime, regardless of which city you live in.

Don’t see a calculator for something you need to work out? Request a calculator and we’ll build it.

Since the new tax regime became the default option in FY 2023-24, one question keeps coming up every single year at tax-planning time: should you stick with the old regime and claim your deductions, or switch to the new regime and its lower slab rates? For FY 2026-27, Budget 2026 left both sets of slab rates unchanged from FY 2025-26 — so the comparison that mattered last year still matters now. Here’s how the two regimes actually stack up, and how to figure out which one puts more money in your pocket.

New tax regime slabs for FY 2026-27

The new regime uses wider, lower-rate slabs and (mostly) skips deductions in exchange:

• ₹0 – ₹4,00,000: Nil
• ₹4,00,000 – ₹8,00,000: 5%
• ₹8,00,000 – ₹12,00,000: 10%
• ₹12,00,000 – ₹16,00,000: 15%
• ₹16,00,000 – ₹20,00,000: 20%
• ₹20,00,000 – ₹24,00,000: 25%
• Above ₹24,00,000: 30%

Two things make this regime more generous than the slabs alone suggest. First, salaried taxpayers still get a standard deduction of ₹75,000. Second, the Section 87A rebate for FY 2026-27 is ₹60,000, which wipes out tax entirely on taxable income up to ₹12,00,000. Put together, a salaried individual with gross income up to roughly ₹12,75,000 can end up paying zero tax under the new regime, before even claiming any other deduction.

Old tax regime slabs for FY 2026-27

The old regime keeps its narrower slabs but allows the full menu of deductions:

• ₹0 – ₹2,50,000: Nil
• ₹2,50,000 – ₹5,00,000: 5%
• ₹5,00,000 – ₹10,00,000: 20%
• Above ₹10,00,000: 30%

The old regime’s real strength isn’t the slabs — it’s everything you can subtract before you get to a taxable number: a ₹50,000 standard deduction, up to ₹1,50,000 under Section 80C (PPF, ELSS, EPF, life insurance, tuition fees), Section 80D for health insurance premiums, HRA exemption if you pay rent, and home loan interest deduction under Section 24(b), among others. Stack enough of these and your effective tax rate can drop well below what the new regime offers on the same gross income. The old regime also has a Section 87A rebate, but it only zeroes out tax up to ₹5,00,000 of taxable income — far lower than the new regime’s ₹12,00,000 threshold.

So which one actually saves you more?

It comes down to one number: how much you can genuinely claim in deductions under the old regime. As a rough rule of thumb:

• Little to no deductions claimed (no rent, minimal 80C, no home loan) — the new regime almost always wins, sometimes by a wide margin, because of the higher rebate threshold and standard deduction.
• Moderate deductions (full 80C + basic health insurance, no HRA) — it’s close, and depends heavily on your income level. Middle-income earners around ₹10–15 lakh often find the two regimes land within a few thousand rupees of each other.
• Heavy deductions (HRA + full 80C + home loan interest + health insurance) — the old regime frequently still wins for salaried employees paying rent in a metro city or servicing a large home loan, especially at higher income levels where the 30% slab kicks in earlier under the old regime but the deductions shrink the taxable base more.

There’s no universal answer because it depends entirely on your specific deduction total, not just your salary. That’s exactly the kind of calculation that’s tedious to do by hand and easy to get wrong — a small error in one section can flip which regime looks cheaper.

Run your own numbers

Rather than estimate, plug your actual income and deduction figures into the Old vs New Tax Regime Comparator. It calculates your tax liability under both regimes side by side using the current FY 2026-27 slabs and rebate rules, so you can see the exact rupee difference instead of relying on a rule of thumb.

A few calculators that feed directly into this decision:

• HRA Exemption Calculator — work out your exact tax-free HRA amount, the single biggest swing factor for salaried renters deciding between regimes.
• EPF Calculator — project your EPF balance, useful when totaling up your 80C contributions.
• Net Salary (In-Hand) Calculator — see your actual take-home pay after tax, once you know which regime you’re using.

Frequently asked questions

Can I switch between regimes every year?
Salaried individuals without business income can choose either regime each financial year when filing their return. Those with business or professional income have more restrictions on switching back and forth, so it’s worth checking the current rules before assuming you can flip annually.

Is the new regime automatically applied if I don’t choose?
Yes — the new regime is the default. If you want the old regime, you (or your employer, for TDS purposes) need to actively opt in.

Does the old regime still make sense if I have a home loan?
Often, yes. Home loan interest under Section 24(b), combined with 80C principal repayment and HRA if applicable, is usually enough to tip the balance toward the old regime for many borrowers — but the only way to know for sure is to run the actual numbers for your income and interest amount.

What if my income changes mid-year?
Re-run the comparison whenever your income, rent, or investment amounts change meaningfully — a regime that made sense at ₹10 lakh income may not be the better choice at ₹18 lakh.

Neither regime is universally “better” — it’s a function of your specific numbers, not a general rule. Five minutes with the comparator calculator will tell you more than any blanket recommendation.

PPF, NPS and Sukanya Samriddhi Yojana all show up on the same “best tax-saving investments” lists, and it’s easy to assume they’re interchangeable Section 80C boxes to tick. They’re not. Each one is built for a different job — one guarantees a fixed return, one is market-linked and retirement-specific, and one only exists if you have a daughter. Picking the wrong one doesn’t cost you money exactly, but it does mean locking funds into a scheme that isn’t actually matched to your goal, sometimes for 15-21 years.

PPF: fixed, guaranteed, for anyone

Public Provident Fund pays a government-set rate — currently 7.1% p.a., unchanged since April 2020 — compounded annually, with zero market exposure. You can open one at any age, deposit up to ₹1,50,000 a year, and the entire thing is EEE: your contribution, the interest, and the maturity amount are all tax-free. The trade-off is a 15-year lock-in (extendable in 5-year blocks) and a return that won’t beat equity over the long run. PPF is the right tool when you want capital preservation with a tax break, not growth. Run your own numbers on the PPF Calculator.

NPS: market-linked, retirement-only, more flexible than it used to be

National Pension System money is invested in a mix of equity, corporate bonds and government securities that you choose, so your return isn’t fixed — it’s tied to market performance, typically planned around a long-term 9-11% assumption rather than promised. NPS is retirement-locked: you generally can’t touch it until 60. What changed recently matters: under PFRDA’s December 2025 rules, the mandatory annuity share dropped from 40% to 20% for corpuses above ₹12 lakh, and smaller corpuses (under ₹8 lakh) can now be withdrawn 100% as lump sum. It’s also the only one of the three with an extra ₹50,000 tax deduction under Section 80CCD(1B), on top of the regular 80C limit. See your projected corpus and exit split on the NPS Calculator.

Sukanya Samriddhi Yojana: the highest rate, but only for a daughter

SSY currently pays 8.2% p.a. — the highest of any small savings scheme — but eligibility is narrow: it’s only for a girl child, opened before she turns 10, with a hard cap of two accounts per family. Deposits run for the first 15 years from account opening; after that the balance just keeps compounding, untouched, until the account matures 21 years after it was opened (not 21 years after her birth — a distinction that trips a lot of parents up). Like PPF, it’s fully EEE. If SSY doesn’t apply to your situation, it simply isn’t an option — there’s no equivalent scheme for a son. Check your own numbers on the Sukanya Samriddhi Yojana Calculator.

Which one actually fits your goal

If you want a guaranteed, tax-free floor under your savings with no market risk, PPF is the default — everyone’s eligible, and 7.1% locked in beats a lot of “safe” alternatives after tax. If you’re specifically building a retirement corpus and can tolerate market swings over a 20-30 year horizon, NPS’s equity exposure and extra ₹50,000 deduction generally win on pure growth, especially now that more of the corpus can come out as lump sum. If you have a daughter under 10, SSY’s 8.2% fixed rate is difficult to beat for a goal 15-21 years out, and it doesn’t compete with PPF or NPS at all — it’s additive, not a substitute. Most households end up using two of the three, not one: PPF or NPS for retirement, SSY layered on top if there’s a daughter to plan for.

None of this replaces knowing what you actually have available to invest each month — start there with the Net Salary / Take-Home Pay Calculator, then split what’s left across whichever of these three schemes actually match your goals. For the fuller picture of what else YogiCalc covers, see Introducing YogiCalc.

Don’t see a calculator for a scheme you’re comparing? Request a calculator and we’ll build it.

A ₹1.2 crore package. A $150,000 offer. A €90,000 relocation contract. Numbers like these get thrown around as if they mean the same thing everywhere. They don’t. What actually lands in your account depends on a completely different deduction stack in every country — income tax bands, social insurance, sometimes a church tax, sometimes a regional surcharge that changes if you move fifty kilometers. Compare gross offers across borders and you’re comparing the wrong number.

Here’s what actually comes out of a paycheck in nine countries, and where to run your own numbers.

India: PF, professional tax, and income tax slabs

Indian salaries get hit three ways: 12% employee Provident Fund on basic pay, a small flat professional tax that varies by state, and income tax on the remainder using the applicable slabs. The PF portion isn’t lost — it’s forced retirement savings — but it doesn’t show up in your bank account this month, which is why “CTC” and “take-home” are two very different conversations with your employer. Run your numbers on the Net Salary / Take-Home Pay Calculator (India).

Once you know your take-home number, the next question is what to do with it. If you’re in India, government-backed schemes are worth comparing first — see the PPF Calculator for a fixed, tax-free return, the NPS Calculator for a market-linked retirement account, or the Sukanya Samriddhi Yojana Calculator if you’re saving for a daughter. If real estate is part of your plan instead, run the numbers with the Rental Yield Calculator before you commit.

United States: federal tax, FICA, and a state that may or may not tax you

US paychecks deduct federal income tax and FICA (Social Security + Medicare) everywhere, then state income tax — which ranges from 0% in Texas, Florida, and seven other states to over 13% in California. The same federal salary nets very differently depending on your zip code. The US Paycheck / Take-Home Pay Calculator covers federal + FICA + state for any pay frequency, and the State Income Tax Estimator shows what your specific state does before you even get to gross-to-net math.

United Kingdom: income tax, National Insurance, and your pension

UK take-home pay comes from income tax on top of your personal allowance, National Insurance, and — for most employees — an automatic workplace pension deduction that reduces take-home now in exchange for retirement savings later. All three combine in the UK Take-Home Pay Calculator.

Ireland: three separate deductions on the same payslip

Ireland is unusual in keeping income tax, USC (Universal Social Charge), and PRSI as three genuinely distinct lines rather than folding them together — each with its own bands and logic. It looks more complicated on paper than it is in practice, but it means a quick mental estimate is less reliable than in most countries. The Ireland Take-Home Pay Calculator combines all three.

Germany: up to five deductions before you see a euro

German payroll is the densest on this list: progressive income tax (Einkommensteuer), the solidarity surcharge (Soli) above a threshold, an optional church tax if you’re a registered church member, and social insurance covering pension, health, unemployment, and long-term care. That’s potentially five separate deductions on one payslip. The Germany Take-Home Pay Calculator combines them into one net figure.

France: taxed as a household, not an individual

France’s income tax uses the quotient familial — total household income divided by a number of “parts” based on marital status and children — before the progressive bands apply, then adds CSG/CRDS social contributions on top. A single person and a married couple with the same combined income can owe meaningfully different tax. The France Take-Home Pay Calculator handles both.

Spain: it depends which region you live in

Spanish income tax (IRPF) splits between a national scale and a regional scale set independently by each of Spain’s 17 autonomous communities, so the same income is taxed differently in Madrid than in Valencia. Add Social Security contributions on top. The Spain Take-Home Pay Calculator uses representative rates and flags the regional variance explicitly.

Italy: national tax plus a local surcharge

Italy’s IRPEF national bands come with an additional regional and municipal surcharge that varies by where you’re registered to live, on top of INPS social security contributions. The Italy Take-Home Pay Calculator combines both, with the local surcharge shown as an approximation.

Netherlands: Box 1, and a major break for eligible expats

Dutch salary income falls under “Box 1” of their tax system, taxed at progressive rates. Incoming expat employees who qualify may be eligible for the 30% ruling, which allows up to 30% of gross salary to be paid tax-free — a genuinely significant difference in take-home pay for those who qualify. Compare both on the Netherlands Take-Home Pay Calculator and the 30% Ruling Calculator.

Why this matters more than it used to

Remote work and cross-border hiring mean more people are genuinely choosing between offers denominated in different currencies, under different tax systems, for the first time. A recruiter quoting gross salary isn’t lying — they just aren’t answering the question you actually need answered. Before you accept, extend, or compare any international offer, run the actual net number through the calculator for that country rather than eyeballing a percentage.

New to YogiCalc? Start with Introducing YogiCalc: 130+ Free Calculators for Finance, Tax, Health & More for the full picture of what’s available, or browse every country’s full calculator set from the YogiCalc homepage.

Don’t see your country yet, or a deduction we’ve missed? Request a calculator and we’ll build it.

Most people compare loans the way they compare phone plans — by glancing at the headline number and hoping it’s fine. The headline number for a loan is usually the interest rate, and it’s the least informative number on the page. Two loans with the same rate can cost wildly different amounts once tenure, processing fees, and prepayment terms are factored in. This is the math lenders are counting on you not doing.

Here’s how to actually do it, category by category.

Start with EMI, not the interest rate

Every installment loan — home, car, personal, education, gold, business — works on the same formula: your EMI (Equated Monthly Installment) is calculated from three inputs: the loan amount (principal), the annual interest rate, and the tenure in months. Change any one of these and your EMI changes, but not proportionally — tenure has an outsized effect that most borrowers underestimate.

A concrete example: on a ₹30 lakh home loan at 9% interest, stretching the tenure from 15 to 30 years lowers your EMI by roughly 30%, but nearly doubles the total interest you pay over the life of the loan. Lenders present the lower EMI as the “affordable” option, and it is more affordable month-to-month — but it’s also a materially different financial decision, not just a smaller version of the same one.

The only reliable way to see this trade-off is to run the actual numbers rather than eyeball them. Our Home Loan EMI Calculator shows the monthly payment and total interest side by side, and the Amortization Schedule Generator breaks the loan down year by year so you can see exactly how much of each EMI is going to interest versus principal at any point in the loan’s life — a number that shifts dramatically in the first few years of any long-tenure loan.

Vehicle and personal loans: shorter tenures usually win

Vehicle and personal loans behave the same way mathematically, but the stakes around long tenures are different, because the underlying asset (or lack of one) matters. A car depreciates faster than a 7-year loan pays it off, which is how people end up owing more than a car is worth. For a Car Loan or Two-Wheeler Loan, it’s worth deliberately testing a shorter tenure in the calculator even if the EMI feels tighter — you’re very rarely worse off finishing a depreciating-asset loan sooner.

Personal loans carry higher interest rates than secured loans (nothing backs them), so the tenure decision matters even more — a longer tenure at a higher rate compounds the total interest cost fast. If you’re borrowing for a specific purpose, it’s worth checking whether a purpose-specific loan is actually cheaper: gold loans are typically secured and cheaper than personal loans for the same amount, education loans often have a moratorium period built in, and business loans sometimes come with tax-deductible interest depending on your jurisdiction (worth checking with an accountant, not a calculator).

Comparing two offers properly

When you have two real loan offers in hand, the temptation is to compare the interest rates and stop there. But processing fees, prepayment penalties, and the exact tenure all move the real cost. Our Loan Comparison Calculator lets you put both offers side by side and see the actual total cost difference, not just the rate difference — which is often a smaller gap than it first appears, and sometimes even reversed once fees are included.

If you already own property, a Loan Against Property is worth comparing against an unsecured personal loan for large expenses — the rate is usually lower because it’s secured, but you’re putting the property up as collateral, which is a real risk worth weighing, not just a math exercise.

Credit cards: the part everyone underestimates

Credit card debt is where the math gets genuinely dangerous, because the minimum payment is designed to keep you paying for a very long time. Our Minimum Due Calculator shows this plainly: paying only the minimum on a moderate balance at typical card interest rates can take years to clear, and you’ll pay more in interest than the original balance. It’s one of the more sobering calculators on the site for exactly that reason — running your own numbers through it is worth five minutes if you’re carrying any balance.

The Credit Card Interest Calculator shows the monthly finance charge on a carried balance directly, which makes the cost of “I’ll pay it off next month” concrete rather than abstract. And separately from what you owe, your Credit Utilization Ratio — how much of your available credit you’re using — is one of the heaviest-weighted factors in most credit scoring models, regardless of country. Keeping it under 30%, and ideally under 10%, tends to help your score even if you always pay in full.

If you’re holding a balance on a high-interest card, it’s worth checking whether a balance transfer to a lower-rate card would actually save money once transfer fees are factored in — sometimes it does, sometimes the fee eats the savings, and the only way to know is to run both numbers.

The one habit worth building

None of these calculators are complicated — they’re mostly the same handful of formulas applied to different situations. The habit worth building isn’t memorizing the math; it’s the reflex to actually open a calculator before signing anything, rather than trusting a lender’s summary of what’s “affordable.” A five-minute check before a multi-year commitment is a reasonable trade.

Browse the full Loans & Credit category for all 16 calculators in one place, including the multi-step Loan EMI + Affordability Chain, which runs your EMI straight into a debt-to-income check.

Have a loan or credit scenario that isn’t covered yet? Request a calculator and we’ll build it.

New to YogiCalc? Start with our overview post, Introducing YogiCalc: 130+ Free Calculators for Finance, Tax, Health & More, for a full tour of what’s available beyond loans and credit.

We built YogiCalc because we were tired of bouncing between five different websites just to calculate a loan EMI, check GST, or figure out a BMI score. So we put everything in one place — 130+ calculators, completely free, no sign-up required, and fast enough to give you answers before you finish your thought.

What Is YogiCalc?

YogiCalc is an all-in-one calculator website for students, professionals, and households worldwide. Whether you need to calculate your home loan EMI, estimate your income tax, check your body mass index, or convert units for a recipe — it’s all here, organized into 13 categories and growing every week.

What Can You Calculate?

Here’s a quick look at the categories available right now:

Loans & Credit — Home, car, personal, gold, and business loan EMI calculators, plus credit card payoff tools. Plug in your amount, rate, and tenure, and get your monthly payment with a full amortization breakdown.

Tax & GST — GST calculator (add or remove GST instantly), income tax estimators for India and other regions, sales tax, and VAT calculators. These are kept current with the latest tax slabs and rates.

Finance & Investment — Compound interest, SIP returns, CAGR, retirement planning, FD and RD calculators. Everything you need to plan your money without opening a spreadsheet.

Investing & Trading — Stock profit/loss, mutual fund returns, forex pip calculators, crypto converters, and futures & options tools for active traders.

Insurance — Life cover calculators, term and health insurance premium estimators, vehicle IDV, and ULIP projections.

Health & Fitness — BMI, BMR, calorie intake, body fat percentage, pregnancy due date, and more. Quick health checks without downloading an app.

Science & Math — Algebra solvers, physics formulas, statistics tools, and unit conversions. Built for students who need answers fast.

Business & Commerce — Profit margin, markup, break-even analysis, payroll, and discount calculators for shop owners and entrepreneurs.

Construction & Home — Concrete volume, flooring area, paint coverage, and brick estimators. Useful whether you’re building a house or just repainting a room.

Everyday & Household — Age calculator, tip splitter, date difference, cooking conversions, and more. The small calculations you do every week.

Student & Education — GPA, CGPA, grade converters, exam percentage, and study-hour planners.

Automotive — Fuel efficiency (km/l and mpg), mileage cost, car depreciation, and road-trip fuel estimators.

Unit & Conversion Tools — Weight, temperature, volume, speed, length, and area converters with instant results.

Why We Built This

Most calculator websites either do one thing well and nothing else, or they’re cluttered with ads to the point where you can’t find the calculate button. YogiCalc takes a different approach: clean design, fast loading, accurate formulas, and every calculator you’d realistically need — all under one roof.

The site also detects your region automatically. If you’re in India, you’ll see INR defaults and Indian tax slabs. If you’re in the US or Europe, rates and currencies adjust accordingly. You can always override this on any calculator page.

What’s Coming Next

We’re actively expanding. On the roadmap: state-by-state US tax calculators (income, property, and sales tax for all 50 states), European country-specific tools for Germany, France, Spain, Ireland, Italy, and the Netherlands, plus India-specific calculators like PPF, NPS, Sukanya Samriddhi, and rental yield. We’re also adding more complex financial tools, scientific calculators, and professional-grade business analytics.

Have a calculator you wish existed? There’s a Request a Calculator button right on the homepage. Tell us what you need and we’ll build it.

Try It Now

Head over to yogicalc.com and try any calculator — no account needed, no popups, just fast answers. Bookmark it, share it, and let us know what you think.

Want a real-world walkthrough first? Read our guide on how to choose the right loan and understand credit card math using the calculators above.