1Which tax regime is better for bankers?
Whichever gives the lower tax after totalling your deductions. With strong PF, HRA and NPS, bankers often still win in the old regime; with few deductions the new regime does — compare both each year.
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ArticleBankers and finance-sector employees earn salary with provident fund, allowances and sometimes concessional loans or other perquisites. Here's how banking professionals can save tax and stay compliant.
Reviewed by CA Harika Chebolu, FCA · Last updated 2026-06-13
Quick answer
Bankers are salaried with PF, NPS and allowances — so the regime choice, HRA, 80C and NPS are the levers, plus perquisite awareness. Here's how.
The new regime gives a Rs 75,000 standard deduction and nil tax up to Rs 12,00,000 with few deductions; the old regime wins only if your HRA, 80C, NPS and 80D together beat that. With strong PF and HRA, many bankers still come out ahead in the old regime — but compare both.
Provident-fund contributions count toward the Rs 1,50,000 80C limit, so check what room remains and top up with PPF, ELSS or insurance. Children's tuition fees and home-loan principal also qualify under 80C.
The Rs 50,000 under 80CCD(1B) sits above your 80C limit, and the employer's NPS contribution under 80CCD(2) is separately deductible — the latter even in the new regime. For finance professionals this is a key, under-used lever.
Bank employees sometimes receive concessional or interest-free loans and other perquisites, which can be taxable as a perquisite within the rules. Understand how your perquisites are valued so you're not surprised, and so genuinely exempt items aren't over-taxed.
If you rent, claim HRA (the least of actual HRA, rent minus 10% of salary, or 50%/40% of salary). And since you understand markets, coordinate your own investments — equity, debt, deposits — with your tax plan rather than treating them separately.
Whichever gives the lower tax after totalling your deductions. With strong PF, HRA and NPS, bankers often still win in the old regime; with few deductions the new regime does — compare both each year.
They can be taxed as a perquisite within the rules. Understand how your perquisites are valued so you aren't surprised at filing and so genuinely exempt items aren't over-taxed.
NPS — the Rs 50,000 under 80CCD(1B) above your 80C limit, plus the employer contribution under 80CCD(2) , which is deductible even in the new regime. It's a key under-used lever.
Want your regime, NPS and perquisites optimised? Write to the firm and we'll plan it with you.