Old vs New Tax Regime 2026 – Salary ₹12 Lakh Case Study (Full Calculation with Illustration – India)

Old vs New Tax Regime 2026 – Salary ₹12 Lakh Detailed Comparison with HRA & Home Loan (India Case Study)

Choosing between Old and New Tax Regime is still confusing for salaried taxpayers in India.

In this detailed illustration, we compare both regimes for Salary ₹12 lakh for AY 2026-27 with HRA, Home Loan, 80C and 80D benefits.

--------------------------------------------------
CASE DETAILS

Gross Salary: ₹12,00,000
Basic Salary: ₹6,00,000
HRA Received: ₹2,00,000
Rent Paid: ₹18,000 per month (₹2,16,000 yearly)
Home Loan Interest: ₹2,00,000
80C Investment: ₹1,50,000
80D Medical Insurance: ₹25,000

--------------------------------------------------
STEP 1 – HRA CALCULATION (Old Regime Only)

HRA Exemption = Least of:
1. HRA Received = ₹2,00,000
2. 50% of Basic (Metro assumed) = ₹3,00,000
3. Rent Paid – 10% of Basic
   ₹2,16,000 – ₹60,000 = ₹1,56,000

HRA Exemption Allowed = ₹1,56,000

--------------------------------------------------
OLD REGIME CALCULATION

Gross Salary = ₹12,00,000
Less: HRA Exemption = ₹1,56,000
Balance = ₹10,44,000

Less: Standard Deduction = ₹50,000
Balance = ₹9,94,000

Less: Home Loan Interest (Sec 24) = ₹2,00,000
Balance = ₹7,94,000

Less: 80C = ₹1,50,000
Balance = ₹6,44,000

Less: 80D = ₹25,000

Final Taxable Income = ₹6,19,000

Tax Calculation (Old Slabs)

0 – 2.5L = Nil
2.5 – 5L = 5% = ₹12,500
5 – 6.19L = 20% on 1.19L = ₹23,800

Total Tax = ₹36,300
Add 4% Cess = ₹1,452

Final Tax = ₹37,752

--------------------------------------------------
NEW REGIME CALCULATION (2026 Slabs)

Gross Salary = ₹12,00,000
Less: Standard Deduction = ₹50,000

Taxable Income = ₹11,50,000

(No HRA, No 80C, No 80D, No Home Loan deduction allowed)

Tax:

0–3L = Nil
3–6L = 5% = ₹15,000
6–9L = 10% = ₹30,000
9–11.5L = 15% on 2.5L = ₹37,500

Total = ₹82,500
Add 4% Cess = ₹3,300

Final Tax = ₹85,800

--------------------------------------------------
FINAL COMPARISON

Old Regime Tax = ₹37,752
New Regime Tax = ₹85,800

Old Regime saves = ₹48,048

--------------------------------------------------
WHO SHOULD CHOOSE WHICH?

Choose Old Regime if:
• You have Home Loan
• You invest full 80C
• You claim HRA
• You pay medical insurance

Choose New Regime if:
• You have no deductions
• You prefer simple filing
• You do not invest much under 80C

--------------------------------------------------
IMPORTANT NOTE FOR INDIAN TAXPAYERS

Always calculate both regimes before filing ITR.
Tax planning should start from April, not in March.

--------------------------------------------------
FREQUENTLY ASKED QUESTIONS

Q1. Can I change regime every year?
Yes, salaried individuals can switch every financial year.

Q2. Is standard deduction available in new regime?
Yes, ₹50,000 is allowed.

Q3. Is home loan interest allowed in new regime?
No (except certain specific cases of let-out property).

--------------------------------------------------
Meta Description:

Old vs New Tax Regime 2026 detailed comparison for ₹12 lakh salary with HRA, home loan, 80C and full calculation example for Indian taxpayers.

Labels:
Income Tax India
Old vs New Tax Regime
Tax Calculation 2026
Salary Tax Planning
Home Loan Deduction

Comments

Post a Comment

Popular posts from this blog

AIS vs Form 26AS – Practical Difference Explained with Illustration

AIS vs Form 26AS – Practical Difference Explained with Illustration (2026 Guide) Income tax filing के समय सबसे बड़ा confusion क्या होता है? AIS देखना है या 26AS? दोनों अलग हैं या same? Chaliye ek simple illustration se samajhte hain. ------------------------------------- Illustration: Mr. Verma salary earn karte hain ₹12 lakh annually. Unhone ITR file karne se pehle Form 26AS download kiya. Form 26AS me dikh raha hai: • TDS by employer • Bank TDS on FD interest Unhone return file kar diya. Baad me AIS check kiya to pata chala: • ₹3 lakh mutual fund redemption • ₹8 lakh high value credit card payment • ₹5 lakh property stamp duty entry Ye sab 26AS me nahi tha. ------------------------------------- Difference samjhiye: Form 26AS kya dikhata hai? • TDS entries • TCS entries • Advance tax • Self-assessment tax AIS kya dikhata hai? • TDS + TCS • Savings interest • Mutual fund transactions • Share transactions • Property purchase/sale • High value transactions • Foreign remittance • Credit c...
Read more

Salary + HRA + Home Loan – Kaunsa Tax Regime Better? (Full Illustration 2026)

Salary + HRA + Home Loan – Kaunsa Tax Regime Better? (Full Illustration 2026) Income tax ka sabse bada confusion ye hota hai: Salary bhi hai   HRA bhi mil raha hai   Home loan bhi chal raha hai   To Old Regime choose karein ya New Regime? Aaj ek real life example ke through samajhte hain. -------------------------------------------------- Case Study -------------------------------------------------- Mr. Raj Annual Salary: ₹14,00,000 HRA received: ₹3,00,000 Rent paid: ₹18,000 per month Home Loan Interest: ₹2,20,000 Principal Repayment: ₹1,40,000 Other 80C Investment: ₹50,000 City: Non-metro -------------------------------------------------- Step 1: HRA Exemption Calculation -------------------------------------------------- Rent paid yearly = 18,000 × 12 = ₹2,16,000 HRA exemption = Minimum of: 1) Actual HRA received = 3,00,000   2) Rent paid – 10% salary      = 2,16,000 – 1,40,000      = 76,000   3)...
Read more

Home Loan Par Income Tax Deduction 2026 – Kitna Benefit Milta Hai? (With Full Illustration)

Agar aapne home loan liya hai ya lene ka plan bana rahe hain, to ek baat clear samajh lijiye: Home loan sirf ghar nahi deta — Ye aapka Income Tax bhi kam karta hai. Lekin kaun si section me kitni deduction milti hai? Old Regime me kitna benefit? New Regime me kya milta hai? Aaj sab simple example ke saath samajhte hain. ------------------------------------------ 1️⃣ Home Loan Par Kaun-Kaun Si Deduction Milti Hai? ------------------------------------------ Section 80C Principal repayment par maximum ₹1.5 lakh tak deduction. Section 24(b) Interest payment par maximum ₹2 lakh tak deduction (self-occupied property). Section 80EE / 80EEA First time home buyers ke liye extra deduction (conditions apply). ------------------------------------------ 2️⃣ Practical Illustration (Real Calculation) ------------------------------------------ Case: Annual Salary = ₹12,00,000 Home Loan Interest = ₹2,20,000 Principal Repayment = ₹1,50,000 Other 80C Investment = ₹50,000 ---------------------------------...
Read more