Home -> Articles
ArticleDeductions need you to spend or invest; exemptions are different — they shave tax off income you're already earning. Most salaried people leave several on the table. Here's how to claim them in full.
Reviewed by CA Harika Chebolu, FCA · Last updated 2026-06-13
Quick answer
HRA, LTA, the standard deduction and salary allowances — the exemptions that cut your tax without locking up a rupee, and how to claim each properly.
In the old regime, your HRA exemption is the least of three figures: actual HRA received, rent paid minus 10% of salary, and 50% of salary if you live in Delhi/Mumbai/Chennai/Kolkata (40% elsewhere). Pay rent through your bank, keep a rent agreement, and quote the landlord's PAN once annual rent crosses Rs 1,00,000. Done right, this is the single largest exemption for most renters.
You don't have to do anything to earn the standard deduction: Rs 75,000 in the new regime, Rs 50,000 in the old, straight off your salary. It's the rare benefit available in both regimes, so it always counts in your favour.
Leave-travel allowance, where it's part of your package, can be claimed against the cost of actual travel within India, subject to the rules and frequency limits. Keep tickets and bills. If you travel anyway, this turns an ordinary trip into a tax saving.
Some salary components and reimbursements — backed by bills and built into your CTC — are exempt or taxed more lightly than a plain "special allowance." Where your employer offers a flexible benefit structure, allocating pay to eligible heads can lower taxable salary. This is mostly an old-regime lever.
Exemptions like HRA and reimbursements depend on how your CTC is split, and that's decided at the start of the year or when you join. Ask HR what's adjustable before the structure locks in — trying to fix it at filing time is too late.
An exemption removes part of your income from tax; a deduction is for money you spend or invest. Exemptions like HRA and the standard deduction reduce tax without requiring fresh outgo, which makes them especially valuable.
It's the least of three amounts. Actual HRA received, rent paid minus 10% of salary, and 50% of salary in Delhi/Mumbai/Chennai/Kolkata (40% elsewhere). It applies in the old regime, and the landlord's PAN is needed once annual rent crosses Rs 1,00,000.
Yes. It's Rs 75,000 in the new regime and Rs 50,000 in the old, applied automatically to salary.
Want your salary structured to use every exemption? Write to the firm and we'll review it.