In what order is salary income tax computed?

Gross salary, less Section 10 exemptions (HRA, LTA, meal/gift vouchers, transport), less Section 16 deductions (standard deduction and professional tax) to get Income from Salary; less home-loan interest under house property; that gives Gross Total Income; less Chapter VI-A deductions (80C, 80D, 80CCD) to get Total Income, on which tax, rebate, surcharge and cess are computed.

Which exemptions are allowed under the new tax regime in FY 2026-27?

Standard deduction of ₹75,000, employer NPS under 80CCD(2), and certain Section 10 perquisite exemptions available to all — meal vouchers (₹200/meal), gift vouchers up to ₹15,000 a year, transport allowance for differently-abled employees and conveyance for official duties. HRA, LTA, 80C, 80D and home-loan interest are not allowed in the new regime.

Salary TDS Calculator FY 2026-27 — New vs Old Regime, Section 10 & Monthly TDS

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Salary TDS Calculator — FY 2026-27

A full salary tax computation in the correct order — Gross salary → Section 10 exemptions → Section 16 (standard deduction, professional tax) → Income from salary → home-loan interest → Chapter VI-A → Total income → tax — for both regimes, with 87A rebate, surcharge, cess, the monthly TDS for the remaining months, and a print-ready statement.

Reviewed and maintained by a practising CA firm · FY 2026-27 (AY 2027-28) · Income Tax Act 2025.

1 · You & salary

Age

Gross salary (annual) (all pay, allowances & perquisites)

Basic + DA (annual) (for HRA & NPS limits)

2 · Section 10 exemptions — both regimes

Meal / food coupons (₹200/meal, both regimes)

Gift vouchers (max ₹15,000/yr)

Transport allow. — differently-abled (₹3,200/mo)

Conveyance for official duty

Other exempt — both regimes

3 · Section 10 exemptions — old regime only (HRA, LTA…)

HRA received (annual)

Rent paid (annual)

City (for HRA)

LTA exemption (10(5))

Children education / hostel

Other exempt — old regime

4 · Section 16 & house property

Standard deduction (auto: ₹75k new / ₹50k old)

Professional tax (16(iii), max ₹2,500 — old only)

Home-loan interest (self-occupied, max ₹2L — old only)

5 · Chapter VI-A (Section 80)

Employer NPS 80CCD(2) (both regimes)

80C (max ₹1.5L — old)

80CCD(1B) NPS (max ₹50k — old)

80D medical insurance (old)

80G donations (old)

80TTA / 80TTB (old)

Other Chapter VI-A (80E, 80EEA… old)

Indicative estimate for planning. The employer's Form 16 / payroll computation is final; verify with your CA, especially for surcharge, perquisite valuation and multiple-employer cases.

The correct order of a salary computation

Tax on salary is built up head-wise, not by simply taxing the gross. The calculator follows the statutory order:

Gross Salary
− Section 10 exemptions (HRA, LTA, meal/gift vouchers, transport)
− Section 16 (standard deduction, professional tax)
= Income from Salary
− Home-loan interest (income from house property, self-occupied, max ₹2L)
= Gross Total Income
− Chapter VI-A (80C, 80D, 80CCD…)
= Total Income → tax → − 87A rebate → + surcharge → + 4% cess

What each regime allows — FY 2026-27

Item	New regime	Old regime
Standard deduction	₹75,000	₹50,000
Meal/gift vouchers, transport (disabled), conveyance	Allowed	Allowed
Employer NPS 80CCD(2)	Allowed (≤14% of basic)	Allowed (≤10%)
HRA, LTA, children-education allowance	Not allowed	Allowed
Professional tax, home-loan interest	Not allowed	Allowed
80C, 80CCD(1B), 80D, 80G, 80TTA/TTB	Not allowed	Allowed
Tax-free salary up to	₹12,75,000 (87A)	₹5,00,000 (87A) + basic exemption by age

Metro for HRA = Delhi, Mumbai, Kolkata, Chennai (and, per recent updates, Bengaluru, Hyderabad, Pune, Ahmedabad). Cess 4% applies on tax + surcharge in both regimes.

Frequently asked questions

Why is gross salary not taxed directly?

Because exemptions (Section 10) and deductions (Section 16, house-property interest, Chapter VI-A) are subtracted first, in a fixed order, to arrive at the Total Income that is actually taxed. The calculator shows each step in the computation statement.

Are meal and gift vouchers really tax-free in the new regime?

Yes — for FY 2026-27, meal vouchers (₹200 per meal) and gift vouchers up to ₹15,000 a year are exempt perquisites under both regimes. They are not in the list of exemptions withdrawn for the new regime. HRA, LTA, 80C and home-loan interest, however, remain old-regime only.

How is the monthly TDS figure derived?

Monthly TDS = (annual tax − TDS already deducted this year) ÷ months remaining including the current month. Enter what's already been deducted and the month you're deducting from, and the calculator does the rest.

Can I print just the computation?

Yes — the “Print / Save PDF” button prints only the computation statement with the tdsguru header and footer, not the whole page.

Running payroll for a company or many clients? The TDS Working File app handles salary (24Q/Form 138) and non-salary TDS together. See the other TDS calculators.