Who This Scenario Is For
A 10 LPA salary represents a solid mid-level professional income in India — typical for software engineers with 3-5 years of experience, team leads, analysts, consultants, or specialist roles in tech companies, banks, and corporate sectors.
At this income level, tax planning becomes important. With basic deductions, the new regime is simpler and saves you about ₹7,800 annually. However, if you have a home loan or can maximize deductions, the old regime can save you significantly more — up to ₹37,700 compared to new regime.
This scenario shows you exactly how much tax you'll pay under both regimes, what your take-home salary will be, and which regime suits your situation best.
Old vs New Regime - Quick Comparison
| Parameter | Old Regime (With Deductions) | New Regime (No Deductions) |
|---|---|---|
| Gross Salary | ₹10,00,000 | ₹10,00,000 |
| Standard Deduction | -₹50,000 | -₹50,000 |
| 80C Deductions (PF + ELSS/PPF) | -₹1,50,000 | ₹0 |
| HRA Exemption | -₹1,00,000 | ₹0 |
| Taxable Income | ₹7,00,000 | ₹9,50,000 |
| Income Tax | ₹54,600 | ₹46,800 |
| Tax Difference | New Regime Saves ₹7,800 per year (with basic deductions only) | |
Important: With only basic deductions (80C + HRA), new regime is better by ₹7,800. However, with additional deductions like home loan interest (₹2L) and NPS (₹50K), old regime becomes significantly better, saving you ₹37,700 compared to new regime.
Old Tax Regime - Detailed Calculation
Income & Deductions (Basic Scenario)
| Gross Annual Salary | ₹10,00,000 |
| Less: Standard Deduction | -₹50,000 |
| Income After Standard Deduction | ₹9,50,000 |
| Less: 80C (PF ₹21,600 + ELSS/PPF ₹1,28,400) | -₹1,50,000 |
| Less: HRA Exemption (Rent ₹15,000/month) | -₹1,00,000 |
| Taxable Income | ₹7,00,000 |
Tax Calculation
| Income Slab | Tax Rate | Taxable Amount | Tax |
|---|---|---|---|
| Up to ₹2.5 lakh | Nil | ₹2,50,000 | ₹0 |
| ₹2.5L - ₹5L | 5% | ₹2,50,000 | ₹12,500 |
| ₹5L - ₹10L | 20% | ₹2,00,000 | ₹40,000 |
| Above ₹10L | 30% | ₹0 | ₹0 |
| Total Tax | ₹52,500 | ||
| Add: 4% Cess | ₹2,100 | ||
| Total Tax Liability (Old Regime) | ₹54,600 | ||
With Additional Deductions (Optimized Scenario)
If you add home loan interest (₹2L) and NPS 80CCD(1B) (₹50K), your taxable income drops to ₹4.5 lakh, reducing tax to approximately ₹9,100. This saves you ₹45,500 compared to basic old regime and ₹37,700 compared to new regime — making old regime the clear winner for homeowners!
New Tax Regime - Detailed Calculation
Income & Deductions
| Gross Annual Salary | ₹10,00,000 |
| Less: Standard Deduction | -₹50,000 |
| Taxable Income (No other deductions allowed) | ₹9,50,000 |
Tax Calculation
| Income Slab | Tax Rate | Taxable Amount | Tax |
|---|---|---|---|
| Up to ₹3 lakh | Nil | ₹3,00,000 | ₹0 |
| ₹3L - ₹7L | 5% | ₹4,00,000 | ₹20,000 |
| ₹7L - ₹10L | 10% | ₹2,50,000 | ₹25,000 |
| Total Tax | ₹45,000 | ||
| Add: 4% Cess | ₹1,800 | ||
| Total Tax Liability (New Regime) | ₹46,800 | ||
Monthly Take-Home Salary Comparison
| Component | Old Regime (Basic) | New Regime | Old Regime (Optimized) |
|---|---|---|---|
| Monthly Gross Salary | ₹83,333 | ₹83,333 | ₹83,333 |
| Less: PF (Employee) | -₹1,800 | -₹1,800 | -₹1,800 |
| Less: Professional Tax | -₹200 | -₹200 | -₹200 |
| Less: Income Tax (Monthly) | -₹4,550 | -₹3,900 | -₹758 |
| Monthly In-Hand Salary | ₹76,783 | ₹77,433 | ₹80,575 |
| Annual Take-Home | ₹9,21,396 | ₹9,29,196 | ₹9,66,896 |
Best Option: Old regime with optimized deductions (home loan + NPS) gives you ₹80,575 monthly in-hand — ₹3,142 more than new regime. Annual benefit: ₹37,700!
Understanding the Comparison
Which Regime Should You Choose?
Choose New Regime If:
- You have no HRA exemption (live with parents or own home without loan)
- You don't have a home loan
- You don't want to lock money in 80C investments
- You prefer simplicity over tax optimization
- Your only deductions are basic PF contributions
Tax savings with new regime: ₹7,800 annually compared to basic old regime without much effort.
Choose Old Regime If:
- You have home loan — interest deduction up to ₹2 lakh saves ₹40,000+ in tax
- You pay rent and can claim HRA exemption (₹1L+ exemption possible)
- You're comfortable investing in 80C instruments (ELSS, PPF, life insurance)
- You invest in NPS (additional ₹50K under 80CCD(1B))
- You want to maximize wealth building through tax-saving investments
Tax savings with optimized old regime: ₹37,700 annually compared to new regime — that's ₹3,142/month extra!
Key Deductions to Maximize at 10 LPA
| Deduction | Limit | Tax Saving (at 20% slab) |
|---|---|---|
| 80C (PF + ELSS + PPF + LIC) | ₹1,50,000 | ₹30,000 |
| HRA Exemption | ₹1,00,000 (approx) | ₹20,000 |
| 80CCD(1B) - NPS | ₹50,000 | ₹10,000 |
| 80D - Health Insurance | ₹25,000-50,000 | ₹5,000-10,000 |
| 24(b) - Home Loan Interest | ₹2,00,000 | ₹40,000 |
| 80E - Education Loan Interest | No limit | Varies (20% of interest) |
| Total Potential Deductions | ₹4,75,000+ | ₹95,000+ |
HRA Exemption at 10 LPA
With ₹4 lakh basic (40% of 10 LPA) and ₹15,000 monthly rent in a metro:
- Actual HRA received: ₹2,00,000 (50% of basic)
- Rent paid minus 10% of basic: ₹1,80,000 - ₹40,000 = ₹1,40,000
- 50% of basic (metro): ₹2,00,000
- HRA exemption = Minimum = ₹1,40,000
However, typical HRA exemption at this salary is around ₹1,00,000 depending on exact rent and salary structure.
Should You Buy a Home at 10 LPA?
At 10 LPA, you can afford a home loan of ₹40-50 lakh (banks offer 4-5x annual income). With EMI of ₹35,000-40,000/month, you'll still have ₹35,000-40,000 after EMI and tax. Home loan interest deduction saves ₹40,000 in tax annually, making it financially viable.
Can You Switch Between Regimes?
Yes! Salaried individuals can choose their preferred regime every financial year when filing ITR. At 10 LPA, evaluate annually — if you buy a house or your situation changes, you can switch regimes to minimize tax.
Calculate Your Exact Tax Liability
Your optimal tax strategy depends on your specific deductions, rent, home loan, and investments. Use our calculator to compare both regimes with your exact numbers.
Use Tax CalculatorFrequently Asked Questions
Is 10 LPA a good salary in India in 2026?
Yes, 10 LPA is well above the median income in India and considered upper-middle class. After taxes and PF, you take home ₹76,000-80,000 monthly. In metros with ₹15,000-20,000 rent and ₹30,000 expenses, you can save ₹25,000-35,000/month comfortably.
How much tax do I actually pay at 10 LPA?
With new regime: ₹46,800 annually (₹3,900/month). With basic old regime: ₹54,600 annually (₹4,550/month). With optimized old regime (home loan + NPS): ₹9,100 annually (₹758/month). The difference between optimized old regime and new regime is ₹37,700 annually!
Which regime is better — old or new?
If you only have basic deductions (80C + HRA), new regime is simpler and saves ₹7,800. But if you have a home loan or invest in NPS, old regime is significantly better — saving up to ₹37,700 compared to new regime. Most people at 10 LPA benefit from new regime unless they own a home.
Can I claim HRA if I live with parents?
Yes, you can pay rent to your parents and claim HRA exemption. You need a rental agreement, must pay via bank transfer (not cash), and your parents must declare this rental income in their ITR. If parents' total income including rent is below ₹2.5 lakh, they won't pay tax.
Should I invest full ₹1.5 lakh in 80C?
Your PF contribution (₹21,600 annually) already counts toward 80C. You need to invest remaining ₹1,28,400. With new regime being simpler at 10 LPA (only ₹7,800 tax difference), invest in 80C only if you're building wealth through ELSS/PPF, not just for tax savings. Or buy a home and claim interest deduction instead.
Is NPS worth it at 10 LPA?
At 20% tax bracket, ₹50,000 NPS investment saves ₹10,000 in tax (20% saving). NPS is good for retirement planning but has restrictions — locked till 60, partial withdrawals limited. If you're young and can afford to lock money, it's beneficial. Otherwise, focus on building emergency fund first.
What's my home loan eligibility at 10 LPA?
Banks typically offer 4-5x annual income, so ₹40-50 lakh home loan. With good credit score and low debt-to-income ratio, you might get up to ₹60 lakh. EMI of ₹40,000/month for ₹50L loan is manageable, leaving you with ₹36,000-40,000 monthly after EMI and tax.
Can I switch tax regimes every year?
Yes, salaried individuals can choose between old and new regime every year when filing ITR. This flexibility is valuable — choose new regime now for simplicity, and switch to old regime later when you buy a house. Evaluate annually based on your deductions.
Do I need a CA at 10 LPA?
Not mandatory, but helpful if you have complex deductions (home loan, multiple investments, rental income). A CA costs ₹2,000-3,000 for ITR filing. For simple salary income with no major deductions, you can file yourself using the income tax portal or online tools.