Income Tax Rules, 2026

The Finance Ministry has notified the Income Tax Rules, 2026 on 20 March 2026.

These rules will be effective from 1 April 2026.

They operationalise the Income-tax Act, 2025, replacing the Income-tax Act, 1961.

Key Highlights

Structural Simplification

Tax rules reduced from 399 → 190.

Tax forms reduced from 511 → 333.

Aim: simplified and user-friendly tax system.

No Change in Tax Slabs

Existing income tax slabs remain unchanged for FY 2026–27.

ITR Deadlines

ITR-1 & ITR-2: 31 July

ITR-3 & ITR-4 (non-audit): 31 August

Tax audit: 31 October

Meal & Gift Benefits

Meal cards up to ₹200 per meal tax-free (earlier ₹50) under old regime.

Gift vouchers up to ₹15,000/year tax-free.

Employer-Provided Benefits (Perquisites)

Company car taxable:

₹8,000/month (≤1.6L engine)

₹10,000/month (>1.6L engine)

Concessional loans taxed based on SBI lending rate difference.

Exception: loans ≤ ₹2 lakh or for medical emergency are tax-free.

HRA (House Rent Allowance)

More cities added for 50% exemption category:

Ahmedabad, Bengaluru, Hyderabad, Pune

Increased transparency & verification in HRA claims.

Education & Allowances

Children education allowance:

Increased from ₹100 → ₹3,000/month per child

Hostel allowance:

Increased from ₹300 → ₹9,000/month per child

Transport sector allowance increased to ₹25,000/month (max limit).

Capital Market & Corporate Changes

STT increased on derivatives:

Futures: 0.02% → 0.05%

Options: 0.1% → 0.15%

Share buyback now taxed as capital gains.

Important Institution

CBDT (Central Board of Direct Taxes)

Constituting instrument: Central Board of Revenue Act, 1963

Headquarters: New Delhi, India

Chairperson: Ravi Agarwal