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Flexi Benefits That Still Save Tax in the New Regime (FY 2026-27)

HRA and LTA don't help in the New Regime, but meals, phone bills, car costs, gifts and employer NPS still do. A ₹20L worked example, with and without a flexi basket.

Published 27 October 2026

The New Regime is the default, and it switches off most of the old salary exemptions. That leads a lot of people to assume a flexible benefits plan is pointless now. It isn't: a handful of benefits are still taxed at a low fixed value — or not at all — in both regimes, because they come from the Income-tax Rules, 2026 on valuing perquisites, not from the exemptions the New Regime removes.

What still works in the New Regime

BenefitFY 2026-27 rule
Meal cards / food couponsTax-free up to ₹200 a meal during working hours (Rule 15, Table IV)
Phone & internet billsBills paid or reimbursed by the employer aren't a perquisite (Rule 15, Table IV)
Car lease or fuel on your own carTaxed at a fixed ₹5,000 (≤1.6 L or EV) / ₹7,000 a month, +₹3,000 with a chauffeur, instead of the real cost (Rule 15, Table II)
Gift vouchersTax-free up to ₹15,000 a year in total; above that, all of it is taxed (Rule 15, Table IV)
Employer NPSDeductible up to 14% of Basic in the New Regime (10% in the Old) (Sec 124(2), old 80CCD(2))
Laptop or phone given for workNo perquisite for using it (Rule 15, Table IV)

What doesn't

  • HRA exemption — HRA is taxed like any other allowance
  • LTA, children's education and hostel allowances
  • Conveyance allowance for your commute — no longer exempt in either regime
  • A fixed fuel or phone allowance paid regardless of bills — that's just taxable salary

A ₹20L worked example

New Regime, Basic at half of CTC. The flexi basket: one ₹200 meal a working day (₹52,800/yr), ₹24,000 of phone and internet bills, ₹15,000 of gift vouchers and ₹60,000 of fuel on your own small car — all carved out of the same CTC — and, separately, employer NPS at the full 14% of Basic (₹1,40,000).

StructureIncome tax/yrIn-hand/mo
No flexi benefits₹1,57,435₹1,29,339
Reimbursements only₹1,25,861₹1,31,970
Reimbursements + employer NPS₹81,916₹1,23,965

The reimbursements alone cut tax by ₹31,574 a year, and all of it shows up as higher take-home. Adding employer NPS takes the saving to ₹75,520 — but your monthly cash falls by ₹5,373, because ₹1.4L a year now goes into your NPS account instead. Counting that NPS money, you're ₹75,520 a year better off; it's just locked away until retirement.

The catch: you have to claim them

Most of these only work against actual bills or records, which means a claim process. Writing in Fortune India in 2018, Bhavin Turakhia called this the "in-hand salary paradox": employees opt out of reimbursements because the paperwork delays the cash, and end up with less over the year. (He runs Zeta, which sells benefits software, and the article predates the New Regime — but the behaviour it describes hasn't changed.) Look at your annual take-home, not the monthly figure, when you decide.

You can only pick what's in your employer's flexi plan. Wisemonk's guide to take-home pay in India lists the same levers — employer NPS, meal and telephone reimbursements — as the usual ways to raise take-home without raising CTC. Two cautions on the rules themselves: the car figure for your own vehicle needs a log of official trips and an employer certificate, and the notified text says gifts are tax-free if they're below ₹15,000 in a year, so treat ₹15,000 as a hard ceiling.

Add your own flexi benefits

Sources & further reading

Section numbers are the Income-tax Act, 2025's, with the 1961 Act's in brackets.

Law and official notices

Articles we drew on

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