By Admin 
In the budget presented on February 1, Finance Minister Nirmala Sitharaman had announced that new rules will be implemented in place of the decades-old income tax law. The proposed Income Tax Rules 2026 are set to be implemented from April 1, 2026. At present, the draft has been kept for public opinion till February 22, after which it will be finalized. Apart from this, tax experts believe that employed people will directly benefit from these changes. TDS will be deducted less and take home salary will increase. Especially the proposed changes in HRA, education and hostel allowance will reduce taxable income. In such a situation, let us tell you today how much your salary will increase due to the new income tax rule, how to understand the calculations in one click.
List of cities with 50 percent HRA exemption will increase
Till now, only those working in Delhi, Mumbai, Kolkata and Chennai used to get HRA exemption up to 50 percent of the basic salary. In the new draft, it is proposed to include Bengaluru, Hyderabad, Pune and Ahmedabad also in this category. Employees living in these cities will now be able to claim up to 50 percent HRA. Whereas in other cities the limit of 40 percent will remain applicable. Apart from this, in the draft rules, there is a proposal to increase the education allowance from Rs 100 per month per child to Rs 3,000 per month. Whereas the limit of hostel allowance can be increased from Rs 300 to Rs 9 thousand per child per month. This exemption will be available up to a maximum of two children.
Relief on income up to Rs 12 lakh
There is a proposal to increase the rebate under Section 87A to Rs 60,000 for those choosing the new tax regime. With this, tax liability on annual income up to Rs 12 lakh can be reduced to zero. This will directly benefit the middle class, while the standard deduction will continue for salaried employees. There is discussion on increasing it from Rs 75,000 to Rs 1 lakh. Apart from this, there is a proposal to increase the tax exemption limit on gifts received from the company from Rs 5000 to Rs 15,000.
Understand the complete account in this way
Suppose the annual gross salary of an employee is Rs 30 lakh, in such a situation, under the old rules, exemption of Rs 2,400 on education allowance, exemption of Rs 7,200 on hostel allowance, HRA exemption of Rs 6 lakh on monthly rent of Rs 75,000 and standard deduction of Rs 50,000, after all this, the net salary will be considered as Rs 23,40,400. Whereas after additional exemption of Rs 4.05 lakh under Chapter VI-A, taxable income will be Rs 19,35,400. Approximately Rs 4,08,844 is taxed on this. In this way the annual take home salary is around Rs 23.47 lakh.
Under the rules of the new draft, there will be a rebate of up to Rs 72,000 on education allowance, a rebate of up to Rs 2,06,000 on hostel allowance and a rebate of up to Rs 7,50,000 on HRA. After these big exemptions, taxable income can come down to around Rs 15,07,000. In this case the tax will be around Rs 2,75,184. This will result in annual tax savings of around Rs 1.33 lakh and the take home salary can increase to around Rs 24.81 lakh. This means that the amount coming in hand every month will increase. According to experts, due to these changes, the annual take home salary of average salaried employees may increase by Rs 25,000 to Rs 80,000. However, its benefit will depend on which tax regime you select and what is your salary structure.
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