Salary income: standard deduction, HRA and perquisites
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Updated 03 Oct 2026
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AI summary
What is taxable in your salary, how HRA is worked out, and what the employer's certificate shows.
5 sections 3 steps
What is taxed
Basic, DA, bonus, commission, most allowances and the taxable value of perquisites (company car, rent-free house, ESOPs).
Standard deduction
₹75,000 in the new regime and ₹50,000 in the old regime. Pensioners get it too.
HRA exemption (old regime only)
The exempt part is the lowest of:
- Actual HRA received
- Rent paid minus 10% of salary (basic + DA)
- 50% of salary in Delhi, Mumbai, Kolkata and Chennai; 40% elsewhere
Give the landlord's PAN to your employer if annual rent is above ₹1 lakh.
Retirement benefits
| Benefit | Exempt limit (non-government) |
|---|---|
| Gratuity | ₹20 lakh |
| Leave encashment at retirement | ₹25 lakh |
| Commuted pension | One-third (with gratuity) or one-half (without) |
The TDS certificate
Your employer issues Form 130 (earlier Form 16) by 15 June after the tax year. Match its salary and TDS with your AIS before filing.
Sources
PreviousDeductions: 80C to 80U under their new numbers Next in Deductions & Salary House property income and home loan interest
#salary income#hra#hra exemption#standard deduction#perquisites#lta#gratuity#leave encashment#form 130#form 16
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