{"id":31259,"date":"2026-02-12T01:31:22","date_gmt":"2026-02-11T20:01:22","guid":{"rendered":"https:\/\/carajput.com\/blog\/?p=31259"},"modified":"2026-02-21T01:53:41","modified_gmt":"2026-02-20T20:23:41","slug":"key-highlights-of-indias-new-income-tax-act-2025","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/key-highlights-of-indias-new-income-tax-act-2025\/","title":{"rendered":"key highlights of India\u2019s New Income-tax Act, 2025"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Page Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69e1e5e74c013\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #000000;color:#000000\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #000000;color:#000000\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69e1e5e74c013\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/carajput.com\/blog\/key-highlights-of-indias-new-income-tax-act-2025\/#Indias_New_Income-tax_Act_2025_%E2%80%93_Effective_1_April_2026\" title=\"India\u2019s New Income-tax Act, 2025 \u2013 Effective 1 April 2026\">India\u2019s New Income-tax Act, 2025 \u2013 Effective 1 April 2026<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/carajput.com\/blog\/key-highlights-of-indias-new-income-tax-act-2025\/#Unified_TDS_Framework_%E2%80%93_Section_393\" title=\"Unified TDS Framework \u2013 Section 393\">Unified TDS Framework \u2013 Section 393<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/carajput.com\/blog\/key-highlights-of-indias-new-income-tax-act-2025\/#Section_402_%E2%80%93_Interpretation_Definitions\" title=\"Section 402 \u2013 Interpretation &amp; Definitions\">Section 402 \u2013 Interpretation &amp; Definitions<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/carajput.com\/blog\/key-highlights-of-indias-new-income-tax-act-2025\/#Income-tax_Slabs_FY_2026%E2%80%9327_New_Regime_as_Default\" title=\"Income-tax Slabs (FY 2026\u201327 | New Regime as Default)\">Income-tax Slabs (FY 2026\u201327 | New Regime as Default)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/carajput.com\/blog\/key-highlights-of-indias-new-income-tax-act-2025\/#Significant_TCS_Rationalisation_%E2%80%93_Section_394\" title=\"Significant TCS Rationalisation \u2013 Section 394\">Significant TCS Rationalisation \u2013 Section 394<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/carajput.com\/blog\/key-highlights-of-indias-new-income-tax-act-2025\/#Major_Revisions_in_Allowances_Perquisite_Valuation\" title=\"Major Revisions in Allowances &amp; Perquisite Valuation\">Major Revisions in Allowances &amp; Perquisite Valuation<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/carajput.com\/blog\/key-highlights-of-indias-new-income-tax-act-2025\/#PAN_Quoting_Requirements%E2%80%94Revised_Thresholds\" title=\"PAN Quoting Requirements\u2014Revised Thresholds\">PAN Quoting Requirements\u2014Revised Thresholds<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/carajput.com\/blog\/key-highlights-of-indias-new-income-tax-act-2025\/#PAN_Requirement%E2%80%94Old_vs_Draft_2026\" title=\"PAN Requirement\u2014Old vs Draft 2026\">PAN Requirement\u2014Old vs Draft 2026<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/carajput.com\/blog\/key-highlights-of-indias-new-income-tax-act-2025\/#Other_Structural_Changes%E2%80%94Verified\" title=\"Other Structural Changes\u2014Verified\">Other Structural Changes\u2014Verified<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/carajput.com\/blog\/key-highlights-of-indias-new-income-tax-act-2025\/#Summary_of_Other_Revisions\" title=\"Summary of Other Revisions\">Summary of Other Revisions<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/carajput.com\/blog\/key-highlights-of-indias-new-income-tax-act-2025\/#Old_vs_New_Regime_Which_Survives_in_2026\" title=\"Old vs. New Regime: Which Survives in 2026?\">Old vs. New Regime: Which Survives in 2026?<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/carajput.com\/blog\/key-highlights-of-indias-new-income-tax-act-2025\/#Deductions_Exemptions_Allowed_Under_New_Tax_Regime_FY_2025-26\" title=\"Deductions &amp; Exemptions Allowed Under New Tax Regime (FY 2025-26)\">Deductions &amp; Exemptions Allowed Under New Tax Regime (FY 2025-26)<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/carajput.com\/blog\/key-highlights-of-indias-new-income-tax-act-2025\/#Section_80CCH_%E2%80%93_Agniveer_Corpus_Fund\" title=\"Section 80CCH \u2013 Agniveer Corpus Fund\">Section 80CCH \u2013 Agniveer Corpus Fund<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/carajput.com\/blog\/key-highlights-of-indias-new-income-tax-act-2025\/#Section_80JJAA_Business_Deduction\" title=\"Section 80JJAA (Business Deduction)\">Section 80JJAA (Business Deduction)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/carajput.com\/blog\/key-highlights-of-indias-new-income-tax-act-2025\/#Home_Loan_%E2%80%93_Limited_Benefit\" title=\"Home Loan \u2013 Limited Benefit\">Home Loan \u2013 Limited Benefit<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/carajput.com\/blog\/key-highlights-of-indias-new-income-tax-act-2025\/#Retirement_Terminal_Benefits_Exemptions_Continue\" title=\"Retirement &amp; Terminal Benefits (Exemptions Continue)\">Retirement &amp; Terminal Benefits (Exemptions Continue)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/carajput.com\/blog\/key-highlights-of-indias-new-income-tax-act-2025\/#Provident_Funds_Retirement_Schemes\" title=\"Provident Funds &amp; Retirement Schemes\">Provident Funds &amp; Retirement Schemes<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/carajput.com\/blog\/key-highlights-of-indias-new-income-tax-act-2025\/#Savings_Insurance\" title=\"Savings &amp; Insurance\">Savings &amp; Insurance<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/carajput.com\/blog\/key-highlights-of-indias-new-income-tax-act-2025\/#Allowances_Still_Exempt_Limited\" title=\"Allowances Still Exempt (Limited)\">Allowances Still Exempt (Limited)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/carajput.com\/blog\/key-highlights-of-indias-new-income-tax-act-2025\/#Deductions_Exemptions_NOT_Allowed_Under_New_Regime\" title=\"Deductions &amp; Exemptions NOT Allowed Under New Regime\">Deductions &amp; Exemptions NOT Allowed Under New Regime<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/carajput.com\/blog\/key-highlights-of-indias-new-income-tax-act-2025\/#Business_Other_Deductions_Removed\" title=\"Business \/ Other Deductions Removed\">Business \/ Other Deductions Removed<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"https:\/\/carajput.com\/blog\/key-highlights-of-indias-new-income-tax-act-2025\/#Quick_Comparison_Snapshot\" title=\"Quick Comparison Snapshot\">Quick Comparison Snapshot<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-23\" href=\"https:\/\/carajput.com\/blog\/key-highlights-of-indias-new-income-tax-act-2025\/#Old_Regime_VS_New_regime\" title=\"Old Regime VS New regime\u00a0\">Old Regime VS New regime\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-24\" href=\"https:\/\/carajput.com\/blog\/key-highlights-of-indias-new-income-tax-act-2025\/#Why_the_Old_Regime_May_Regain_Popularity\" title=\"Why the Old Regime May Regain Popularity\">Why the Old Regime May Regain Popularity<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-25\" href=\"https:\/\/carajput.com\/blog\/key-highlights-of-indias-new-income-tax-act-2025\/#%E2%80%9CIncome%E2%80%9D_under_the_Income-tax_Act_2025\" title=\"\u201cIncome\u201d under the Income-tax Act, 2025?\">\u201cIncome\u201d under the Income-tax Act, 2025?<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-26\" href=\"https:\/\/carajput.com\/blog\/key-highlights-of-indias-new-income-tax-act-2025\/#Ordinary_Commercial_Income\" title=\"Ordinary Commercial Income :\u00a0\">Ordinary Commercial Income :\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-27\" href=\"https:\/\/carajput.com\/blog\/key-highlights-of-indias-new-income-tax-act-2025\/#Employment_Income_and_Allowances\" title=\"Employment Income and Allowances\">Employment Income and Allowances<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-28\" href=\"https:\/\/carajput.com\/blog\/key-highlights-of-indias-new-income-tax-act-2025\/#Voluntary_Contributions\" title=\"Voluntary Contributions\">Voluntary Contributions<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-29\" href=\"https:\/\/carajput.com\/blog\/key-highlights-of-indias-new-income-tax-act-2025\/#Benefits_Perquisites_Corporate_Anti-Avoidance_Measures\" title=\"Benefits, Perquisites &amp; Corporate Anti-Avoidance Measures\">Benefits, Perquisites &amp; Corporate Anti-Avoidance Measures<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-30\" href=\"https:\/\/carajput.com\/blog\/key-highlights-of-indias-new-income-tax-act-2025\/#Casual_Windfall_and_Speculative_Receipts\" title=\"Casual, Windfall and Speculative Receipts\">Casual, Windfall and Speculative Receipts<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-31\" href=\"https:\/\/carajput.com\/blog\/key-highlights-of-indias-new-income-tax-act-2025\/#Deemed_Income_Provisions\" title=\"Deemed Income Provisions\">Deemed Income Provisions<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-32\" href=\"https:\/\/carajput.com\/blog\/key-highlights-of-indias-new-income-tax-act-2025\/#Summary%E2%80%94High-Level_Takeaways\" title=\"Summary\u2014High-Level Takeaways\">Summary\u2014High-Level Takeaways<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 data-start=\"0\" data-end=\"125\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-31261\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/02\/Indias-New-Income-tax-Act-2025-1.jpeg\" alt=\"India\u2019s New Income-tax Act, 2025\" width=\"857\" height=\"1236\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/02\/Indias-New-Income-tax-Act-2025-1.jpeg 714w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/02\/Indias-New-Income-tax-Act-2025-1-208x300.jpeg 208w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/02\/Indias-New-Income-tax-Act-2025-1-710x1024.jpeg 710w\" sizes=\"(max-width: 857px) 100vw, 857px\" \/><\/h2>\n<h2 data-start=\"0\" data-end=\"125\"><span class=\"ez-toc-section\" id=\"Indias_New_Income-tax_Act_2025_%E2%80%93_Effective_1_April_2026\"><\/span><span style=\"color: #000080;\">India\u2019s New Income-tax Act, 2025 \u2013 Effective 1 April 2026<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p data-start=\"201\" data-end=\"493\">The Income-tax Act, 2025 represents a structural rewrite of India\u2019s direct tax law. One of the most significant changes is the complete restructuring of the TDS and TCS framework, indicating a strong policy shift toward consolidation, simplification, and transaction-level monitoring.\u00a0 Below are the key highlights:<\/p>\n<h3 data-start=\"531\" data-end=\"575\"><span class=\"ez-toc-section\" id=\"Unified_TDS_Framework_%E2%80%93_Section_393\"><\/span><span style=\"color: #000080;\">Unified TDS Framework \u2013 <em data-start=\"562\" data-end=\"575\">Section 393<\/em><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p data-start=\"577\" data-end=\"764\">The multiple provisions under the existing Section 194 series (194C, 194J, 194H, 194I, 194Q, etc.) are proposed to be consolidated under a single umbrella provision\u2014Section 393.\u00a0 Objective of\u00a0Unified TDS Framework \u2013 <em data-start=\"562\" data-end=\"575\">Section 393<\/em><\/p>\n<ul data-start=\"781\" data-end=\"963\">\n<li data-start=\"781\" data-end=\"819\">\n<p data-start=\"783\" data-end=\"819\">Reduce fragmentation of provisions<\/p>\n<\/li>\n<li data-start=\"820\" data-end=\"856\">\n<p data-start=\"822\" data-end=\"856\">Improve interpretational clarity<\/p>\n<\/li>\n<li data-start=\"857\" data-end=\"904\">\n<p data-start=\"859\" data-end=\"904\">Enable streamlined compliance and reporting<\/p>\n<\/li>\n<li data-start=\"905\" data-end=\"963\">\n<p data-start=\"907\" data-end=\"963\">Align better with technology-driven tax administration<\/p>\n<\/li>\n<\/ul>\n<p data-start=\"965\" data-end=\"1108\">The practical impact will largely depend on how rates, thresholds, and exclusions are preserved or modified in the final notified rules.<\/p>\n<h3 data-start=\"1115\" data-end=\"1164\"><span class=\"ez-toc-section\" id=\"Section_402_%E2%80%93_Interpretation_Definitions\"><\/span><span style=\"color: #000080;\">Section 402 \u2013 Interpretation &amp; Definitions<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p data-start=\"1166\" data-end=\"1266\">A dedicated interpretation provision introduces clearer statutory definitions for key terms such as \u201cContractor,\u201d \u201cProfessional,\u201d Other classification-sensitive categories. This may significantly reduce long-standing litigation around professional vs. contractual payments, the applicability of specific TDS rates, Nature-of-payment disputes<\/p>\n<h3 data-start=\"1527\" data-end=\"1587\"><span class=\"ez-toc-section\" id=\"Income-tax_Slabs_FY_2026%E2%80%9327_New_Regime_as_Default\"><\/span><span style=\"color: #000080;\">Income-tax Slabs (FY 2026\u201327 | New Regime as Default)<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p data-start=\"1589\" data-end=\"1661\">The new regime continues to be positioned as the default tax system.\u00a0 Proposed slab structure under FY 2026\u201327 | New Regime as Default\u00a0:<\/p>\n<div class=\"TyagGW_tableContainer\">\n<div class=\"group TyagGW_tableWrapper flex flex-col-reverse w-fit\" tabindex=\"-1\">\n<table class=\"w-fit min-w-(--thread-content-width)\" style=\"height: 378px;\" width=\"758\" data-start=\"1693\" data-end=\"1917\">\n<thead data-start=\"1693\" data-end=\"1720\">\n<tr data-start=\"1693\" data-end=\"1720\">\n<th class=\"\" data-start=\"1693\" data-end=\"1708\" data-col-size=\"sm\">Income Range<\/th>\n<th class=\"\" data-start=\"1708\" data-end=\"1720\" data-col-size=\"sm\">Tax Rate<\/th>\n<\/tr>\n<\/thead>\n<tbody data-start=\"1749\" data-end=\"1917\">\n<tr data-start=\"1749\" data-end=\"1771\">\n<td data-start=\"1749\" data-end=\"1764\" data-col-size=\"sm\">\u20b90 \u2013 \u20b94 lakh<\/td>\n<td data-start=\"1764\" data-end=\"1771\" data-col-size=\"sm\">Nil<\/td>\n<\/tr>\n<tr data-start=\"1772\" data-end=\"1793\">\n<td data-start=\"1772\" data-end=\"1787\" data-col-size=\"sm\">\u20b94 \u2013 \u20b98 lakh<\/td>\n<td data-start=\"1787\" data-end=\"1793\" data-col-size=\"sm\">5%<\/td>\n<\/tr>\n<tr data-start=\"1794\" data-end=\"1817\">\n<td data-start=\"1794\" data-end=\"1810\" data-col-size=\"sm\">\u20b98 \u2013 \u20b912 lakh<\/td>\n<td data-start=\"1810\" data-end=\"1817\" data-col-size=\"sm\">10%<\/td>\n<\/tr>\n<tr data-start=\"1818\" data-end=\"1842\">\n<td data-start=\"1818\" data-end=\"1835\" data-col-size=\"sm\">\u20b912 \u2013 \u20b916 lakh<\/td>\n<td data-start=\"1835\" data-end=\"1842\" data-col-size=\"sm\">15%<\/td>\n<\/tr>\n<tr data-start=\"1843\" data-end=\"1867\">\n<td data-start=\"1843\" data-end=\"1860\" data-col-size=\"sm\">\u20b916 \u2013 \u20b920 lakh<\/td>\n<td data-start=\"1860\" data-end=\"1867\" data-col-size=\"sm\">20%<\/td>\n<\/tr>\n<tr data-start=\"1868\" data-end=\"1892\">\n<td data-start=\"1868\" data-end=\"1885\" data-col-size=\"sm\">\u20b920 \u2013 \u20b924 lakh<\/td>\n<td data-start=\"1885\" data-end=\"1892\" data-col-size=\"sm\">25%<\/td>\n<\/tr>\n<tr data-start=\"1893\" data-end=\"1917\">\n<td data-start=\"1893\" data-end=\"1910\" data-col-size=\"sm\">Above \u20b924 lakh<\/td>\n<td data-start=\"1910\" data-end=\"1917\" data-col-size=\"sm\">30%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<\/div>\n<ul>\n<li data-start=\"1919\" data-end=\"2047\">Standard Deduction: INR 75,000 (under New Regime)<\/li>\n<li data-start=\"1919\" data-end=\"2047\">Section 87A Rebate: Up to INR 60,000 (subject to specified exclusions)<\/li>\n<li data-start=\"1919\" data-end=\"2047\">This structure strengthens the shift toward a simplified, deduction-light tax regime.<\/li>\n<\/ul>\n<h3 data-start=\"2141\" data-end=\"2195\"><span class=\"ez-toc-section\" id=\"Significant_TCS_Rationalisation_%E2%80%93_Section_394\"><\/span><span style=\"color: #000080;\">Significant TCS Rationalisation \u2013 <em data-start=\"2182\" data-end=\"2195\">Section 394<\/em><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p data-start=\"2197\" data-end=\"2226\">Key proposed changes to significant TCS Rationalization in the section 394 include\u00a0the following:<\/p>\n<ul data-start=\"2228\" data-end=\"2481\">\n<li data-start=\"2228\" data-end=\"2292\">\n<p data-start=\"2230\" data-end=\"2292\">2% TCS on specified goods (Liquor, Timber, Minerals, etc.)<\/p>\n<\/li>\n<li data-start=\"2293\" data-end=\"2358\">\n<p data-start=\"2295\" data-end=\"2358\">1% TCS on luxury goods &amp; motor vehicles exceeding \u20b910 lakhs<\/p>\n<\/li>\n<li data-start=\"2359\" data-end=\"2397\">\n<p data-start=\"2361\" data-end=\"2397\">2% TCS on overseas tour packages<\/p>\n<\/li>\n<li data-start=\"2398\" data-end=\"2481\">\n<p data-start=\"2400\" data-end=\"2481\">20% TCS under LRS (for non-medical\/education remittances) exceeding INR 10 lakhs<\/p>\n<\/li>\n<\/ul>\n<p data-start=\"2483\" data-end=\"2621\">The taxpayer has to enhance tracking of high-value and discretionary transactions through strengthened reporting mechanisms.\u00a0 Taxpayers and professionals required to implement the Enterprise Resource Planning\u00a0 system and payroll systems will require reconfiguration; contract classification must be reviewed; vendor onboarding processes may need updates; the cash flow impact due to TCS expansion must be assessed; and advisory opportunities for restructuring high-value transactions must be explored.<\/p>\n<div>\n<h3><span class=\"ez-toc-section\" id=\"Major_Revisions_in_Allowances_Perquisite_Valuation\"><\/span><span style=\"color: #000080;\"><strong>Major Revisions in Allowances &amp; Perquisite Valuation<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The allowances and perquisite values that had been static since the 1960s have been substantially revised upward,\u00a0<span style=\"color: #000080;\">Old vs Draft 2026\u2014Verified mentioned under following Table<\/span><\/p>\n<div class=\"___i31lg00 f10pi13n f14t3ns0 f1nbblvp fat0sn4 f1ov4xf1 fekwl8i f1lmfglv f1oz7aqm f1abmfm4 f1w619qj f16h0jq8\">\n<table class=\"___1hm93bs f1ddd56o f16vktn6 f1enuhaj fdclmfp f1ev3kgc ftgm304 f1uinfot fibjyge fvueend f9yszdx f1fu4s3n f3l3pb3 f1s2k7dp f8fmt76 fjvbh62 fysh76l fic4ptz f1yenhzu f1yn6nvh f14tj6oe f1jq587y f1el8yx3 f1pymoxg f1ofu761 fe6itr f7coize f1794535 f70r78m f4zgifc fk1v6el f16pyhcb fo436u6 fzy4j18 fc43013 f1hmrcvb fc4t9fq fgp09rh fjnyn6r\" style=\"height: 277px;\" tabindex=\"0\" width=\"840\">\n<tbody>\n<tr>\n<th>Item<\/th>\n<th>BEFORE (Old Rules)<\/th>\n<th>AFTER (Draft 2026 Rules)<\/th>\n<th><\/th>\n<\/tr>\n<tr>\n<th scope=\"row\"><strong>Children Education Allowance<\/strong><\/th>\n<td>\u20b9100\/month\/child<\/td>\n<td>\u20b93,000\/month\/child<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th scope=\"row\"><strong>Hostel Allowance<\/strong><\/th>\n<td>\u20b9300\/month\/child<\/td>\n<td>\u20b99,000\/month\/child<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th scope=\"row\"><strong>Free Meals<\/strong><\/th>\n<td>\u20b950\/meal<\/td>\n<td>\u20b9200\/meal<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th scope=\"row\"><strong>Gifts (Non\u2011cash)<\/strong><\/th>\n<td>\u20b95,000\/year<\/td>\n<td>\u20b915,000\/year<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th scope=\"row\"><strong>Car (&lt;1.6L engine)<\/strong><\/th>\n<td>\u20b91,800 + \u20b9900 (driver)<\/td>\n<td>\u20b95,000 + \u20b93,000 (driver)<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th scope=\"row\"><strong>Car (&gt;1.6L engine)<\/strong><\/th>\n<td>\u20b92,400 + \u20b9900 (driver)<\/td>\n<td>\u20b97,000 + \u20b93,000 (driver)<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th scope=\"row\"><strong>Overseas Medical Treatment<\/strong><\/th>\n<td>Tax\u2011free only if income &lt; \u20b92L<\/td>\n<td>Tax\u2011free if income &lt; \u20b98L<\/td>\n<td><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<ul>\n<li>Aligns exemptions with inflation \u2192 first major revision in decades.<\/li>\n<li>Makes CTC structuring meaningful and modern.<\/li>\n<li>Reduces unnecessary taxation created by archaic limits.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"PAN_Quoting_Requirements%E2%80%94Revised_Thresholds\"><\/span><span style=\"color: #000080;\"><strong>PAN Quoting Requirements\u2014Revised Thresholds<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>News24 confirms sweeping rationalization of PAN reporting rules. ClearTax provides the detailed table<\/p>\n<h3><span class=\"ez-toc-section\" id=\"PAN_Requirement%E2%80%94Old_vs_Draft_2026\"><\/span><span style=\"color: #000080;\"><strong>PAN Requirement\u2014Old vs Draft 2026<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"___i31lg00 f10pi13n f14t3ns0 f1nbblvp fat0sn4 f1ov4xf1 fekwl8i f1lmfglv f1oz7aqm f1abmfm4 f1w619qj f16h0jq8\">\n<table class=\"___1hm93bs f1ddd56o f16vktn6 f1enuhaj fdclmfp f1ev3kgc ftgm304 f1uinfot fibjyge fvueend f9yszdx f1fu4s3n f3l3pb3 f1s2k7dp f8fmt76 fjvbh62 fysh76l fic4ptz f1yenhzu f1yn6nvh f14tj6oe f1jq587y f1el8yx3 f1pymoxg f1ofu761 fe6itr f7coize f1794535 f70r78m f4zgifc fk1v6el f16pyhcb fo436u6 fzy4j18 fc43013 f1hmrcvb fc4t9fq fgp09rh fjnyn6r\" tabindex=\"0\">\n<tbody>\n<tr>\n<th>Transaction Type<\/th>\n<th>Old Limit<\/th>\n<th>Draft 2026 Limit<\/th>\n<th><\/th>\n<\/tr>\n<tr>\n<th scope=\"row\"><strong>Motor Vehicle Purchase<\/strong><\/th>\n<td>PAN for all except 2\u2011wheelers<\/td>\n<td>PAN for vehicles &gt; \u20b95 lakh (incl. 2\u2011wheelers)<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th scope=\"row\"><strong>Hotel\/Restaurant Cash Payment<\/strong><\/th>\n<td>&gt; \u20b950,000<\/td>\n<td>&gt; \u20b91,00,000<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th scope=\"row\"><strong>Life Insurance Premium<\/strong><\/th>\n<td>&gt; \u20b950,000\/year<\/td>\n<td>PAN required for account\u2011based relationship<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th scope=\"row\"><strong>Immovable Property<\/strong><\/th>\n<td>&gt; \u20b910 lakh<\/td>\n<td>&gt; \u20b920 lakh<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th scope=\"row\"><strong>Cash Deposits\/Withdrawals<\/strong><\/th>\n<td>\u2265 \u20b920 lakh<\/td>\n<td>\u2265 \u20b910 lakh\/year<\/td>\n<td><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p>Higher limits reduce the compliance burden for mid\u2011range transactions, there is a clear\u00a0shift toward monitoring large and structured financial behavior, and cash withdrawals become more tightly monitored.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Other_Structural_Changes%E2%80%94Verified\"><\/span><span style=\"color: #000080;\"><strong>Other Structural Changes\u2014Verified<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>ClearTax and News24 confirm additional compliance-oriented reforms.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Summary_of_Other_Revisions\"><\/span><span style=\"color: #000080;\"><strong>Summary of Other Revisions<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"___i31lg00 f10pi13n f14t3ns0 f1nbblvp fat0sn4 f1ov4xf1 fekwl8i f1lmfglv f1oz7aqm f1abmfm4 f1w619qj f16h0jq8\">\n<table class=\"___1hm93bs f1ddd56o f16vktn6 f1enuhaj fdclmfp f1ev3kgc ftgm304 f1uinfot fibjyge fvueend f9yszdx f1fu4s3n f3l3pb3 f1s2k7dp f8fmt76 fjvbh62 fysh76l fic4ptz f1yenhzu f1yn6nvh f14tj6oe f1jq587y f1el8yx3 f1pymoxg f1ofu761 fe6itr f7coize f1794535 f70r78m f4zgifc fk1v6el f16pyhcb fo436u6 fzy4j18 fc43013 f1hmrcvb fc4t9fq fgp09rh fjnyn6r\" style=\"height: 153px;\" tabindex=\"0\" width=\"832\">\n<tbody>\n<tr>\n<th><span style=\"color: #000080;\">Item<\/span><\/th>\n<th><span style=\"color: #000080;\">BEFORE<\/span><\/th>\n<th><span style=\"color: #000080;\">AFTER (2026 Rules)<\/span><\/th>\n<th><\/th>\n<\/tr>\n<tr>\n<th scope=\"row\">Property SFT Reporting<\/th>\n<td>\u20b930 lakh<\/td>\n<td>\u20b945 lakh<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th scope=\"row\">Books of Accounts (Professionals)<\/th>\n<td>Manual allowed<\/td>\n<td>Mandatory digital books<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<th scope=\"row\">CBDC (Digital Rupee)<\/th>\n<td>Not recognised<\/td>\n<td>Recognised as valid payment mode<\/td>\n<td><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p>Mandatory digital books = serious push for end\u2011to\u2011end digital compliance,\u00a0strengthens tax administration and reduces audit disputes. and CBDC integration modernizes the tax ecosystem.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Old_vs_New_Regime_Which_Survives_in_2026\"><\/span><span style=\"color: #000080;\"><strong>Old vs. New Regime: Which Survives in 2026?<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Financial Express confirms that the old tax regime is absolutely NOT being phased out, and the draft rules show clear intent to keep both regimes operational.\u00a0 Key Insights .<\/p>\n<ul>\n<li>Draft rules do not distinguish exemptions between new and old regimes.<\/li>\n<li>Upgraded allowances and perquisites hugely benefit the old regime.<\/li>\n<li>Old\u2011regime benefits (80C, 80D, HRA, LTA) remain fully intact.<\/li>\n<\/ul>\n<h2 data-start=\"244\" data-end=\"313\"><span class=\"ez-toc-section\" id=\"Deductions_Exemptions_Allowed_Under_New_Tax_Regime_FY_2025-26\"><\/span><span style=\"color: #000080;\">Deductions &amp; Exemptions Allowed Under New Tax Regime (FY 2025-26)<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p data-start=\"315\" data-end=\"340\"><span style=\"color: #000080;\">Standard Deduction : <\/span>\u20b975,000<span style=\"font-size: 16px;\"> \u2013 Salaried individuals &amp; pensioners (from salary\/pension income)<\/span><\/p>\n<p data-start=\"315\" data-end=\"340\">Family Pension: Deduction of \u20b925,000 or 1\/3rd of family pension, whichever is lower (under \u201cIncome from Other Sources\u201d)<\/p>\n<p data-start=\"561\" data-end=\"615\">Section 80CCD(2) \u2013 Employer Contribution to NPS<\/p>\n<ul data-start=\"617\" data-end=\"1071\">\n<li data-start=\"617\" data-end=\"661\">\n<p data-start=\"619\" data-end=\"661\">Employer\u2019s contribution to NPS is allowed. Maximum deduction allowable under NPS :<\/p>\n<ul data-start=\"685\" data-end=\"875\">\n<li data-start=\"685\" data-end=\"744\">\n<p data-start=\"687\" data-end=\"744\">14% of salary (Basic + DA) for Government employees<\/p>\n<\/li>\n<li data-start=\"747\" data-end=\"875\">\n<p data-start=\"749\" data-end=\"875\">Up to 10% (earlier 10%, enhanced to 14% in new regime for private sector as per amendments) \u2014 subject to applicable limits<\/p>\n<\/li>\n<\/ul>\n<\/li>\n<li data-start=\"876\" data-end=\"950\">\n<p data-start=\"878\" data-end=\"950\">Employee\u2019s own contribution NOT allowed under 80CCD(1) or 80CCD(1B).<\/p>\n<\/li>\n<li data-start=\"951\" data-end=\"1071\">\n<p data-start=\"953\" data-end=\"1071\">Combined employer contribution to NPS + EPF + Superannuation exempt up to \u20b97.5 lakh per year (excess taxable).<\/p>\n<\/li>\n<\/ul>\n<h3 data-start=\"1078\" data-end=\"1121\"><span class=\"ez-toc-section\" id=\"Section_80CCH_%E2%80%93_Agniveer_Corpus_Fund\"><\/span><span style=\"color: #000080;\">Section 80CCH \u2013 Agniveer Corpus Fund<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul data-start=\"1123\" data-end=\"1218\">\n<li data-start=\"1123\" data-end=\"1218\">\n<p data-start=\"1125\" data-end=\"1218\">Contribution by Agniveer or Central Government to <strong data-start=\"1175\" data-end=\"1197\">Seva Nidhi account<\/strong> is fully deductible.<\/p>\n<\/li>\n<\/ul>\n<h3 data-start=\"1225\" data-end=\"1267\"><span class=\"ez-toc-section\" id=\"Section_80JJAA_Business_Deduction\"><\/span><span style=\"color: #000080;\">Section 80JJAA (Business Deduction)<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul data-start=\"1269\" data-end=\"1383\">\n<li data-start=\"1269\" data-end=\"1383\">\n<p data-start=\"1271\" data-end=\"1383\">30% of additional employee cost (available to eligible businesses opting for new regime, subject to conditions).<\/p>\n<\/li>\n<\/ul>\n<h3 data-start=\"1390\" data-end=\"1424\"><span class=\"ez-toc-section\" id=\"Home_Loan_%E2%80%93_Limited_Benefit\"><\/span><span style=\"color: #000080;\">Home Loan \u2013 Limited Benefit<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul data-start=\"1426\" data-end=\"1675\">\n<li data-start=\"1426\" data-end=\"1536\">\n<p data-start=\"1428\" data-end=\"1536\">Interest on loan for let-out property allowed (as deduction while computing income from house property).<\/p>\n<\/li>\n<li data-start=\"1537\" data-end=\"1617\">\n<p data-start=\"1539\" data-end=\"1617\">Self-occupied property interest deduction under Section 24(b) NOT allowed.<\/p>\n<\/li>\n<li data-start=\"1618\" data-end=\"1675\">\n<p data-start=\"1620\" data-end=\"1675\">No set-off of house property loss against other income.<\/p>\n<\/li>\n<\/ul>\n<h3 data-start=\"1682\" data-end=\"1741\"><span class=\"ez-toc-section\" id=\"Retirement_Terminal_Benefits_Exemptions_Continue\"><\/span>Retirement &amp; Terminal Benefits (Exemptions Continue)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p data-start=\"1743\" data-end=\"1791\">The following remain exempt (subject to limits):<\/p>\n<ul data-start=\"1793\" data-end=\"2076\">\n<li data-start=\"1793\" data-end=\"1860\">\n<p data-start=\"1795\" data-end=\"1860\">Gratuity (\u20b920 lakh for non-govt; fully exempt for govt employees)<\/p>\n<\/li>\n<li data-start=\"1861\" data-end=\"1909\">\n<p data-start=\"1863\" data-end=\"1909\">Leave encashment on retirement (as per limits)<\/p>\n<\/li>\n<li data-start=\"1910\" data-end=\"1954\">\n<p data-start=\"1912\" data-end=\"1954\">Voluntary Retirement (VRS) \u2013 up to \u20b95 lakh<\/p>\n<\/li>\n<li data-start=\"1955\" data-end=\"1982\">\n<p data-start=\"1957\" data-end=\"1982\">Retrenchment compensation<\/p>\n<\/li>\n<li data-start=\"1983\" data-end=\"2014\">\n<p data-start=\"1985\" data-end=\"2014\">Death-cum-retirement benefits<\/p>\n<\/li>\n<li data-start=\"2015\" data-end=\"2076\">\n<p data-start=\"2017\" data-end=\"2076\">Commuted pension (1\/3rd or \u00bd depending on gratuity receipt)<\/p>\n<\/li>\n<\/ul>\n<h3 data-start=\"2083\" data-end=\"2126\"><span class=\"ez-toc-section\" id=\"Provident_Funds_Retirement_Schemes\"><\/span><span style=\"color: #000080;\">Provident Funds &amp; Retirement Schemes<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul data-start=\"2128\" data-end=\"2343\">\n<li data-start=\"2128\" data-end=\"2182\">\n<p data-start=\"2130\" data-end=\"2182\">Employer contribution within \u20b97.5 lakh limit exempt.<\/p>\n<\/li>\n<li data-start=\"2183\" data-end=\"2229\">\n<p data-start=\"2185\" data-end=\"2229\">EPF interest exempt up to prescribed limits.<\/p>\n<\/li>\n<li data-start=\"2230\" data-end=\"2265\">\n<p data-start=\"2232\" data-end=\"2265\">PPF interest &amp; maturity \u2013 exempt.<\/p>\n<\/li>\n<li data-start=\"2266\" data-end=\"2305\">\n<p data-start=\"2268\" data-end=\"2305\">NPS lump sum withdrawal (60%) exempt.<\/p>\n<\/li>\n<li data-start=\"2306\" data-end=\"2343\">\n<p data-start=\"2308\" data-end=\"2343\">Partial Tier I withdrawal \u2013 exempt.<\/p>\n<\/li>\n<\/ul>\n<h3 data-start=\"2350\" data-end=\"2376\"><span class=\"ez-toc-section\" id=\"Savings_Insurance\"><\/span><span style=\"color: #000080;\">Savings &amp; Insurance<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul data-start=\"2378\" data-end=\"2619\">\n<li data-start=\"2378\" data-end=\"2484\">\n<p data-start=\"2380\" data-end=\"2441\">Section 10(15)(i): Post Office Savings interest exempt up to:<\/p>\n<ul data-start=\"2444\" data-end=\"2484\">\n<li data-start=\"2444\" data-end=\"2465\">\n<p data-start=\"2446\" data-end=\"2465\">\u20b93,500 (individual)<\/p>\n<\/li>\n<li data-start=\"2468\" data-end=\"2484\">\n<p data-start=\"2470\" data-end=\"2484\">\u20b97,000 (joint)<\/p>\n<\/li>\n<\/ul>\n<\/li>\n<li data-start=\"2485\" data-end=\"2569\">\n<p data-start=\"2487\" data-end=\"2569\">Section 10(10D): Life insurance maturity proceeds (subject to premium conditions).<\/p>\n<\/li>\n<li data-start=\"2570\" data-end=\"2619\">\n<p data-start=\"2572\" data-end=\"2619\">Sukanya Samriddhi \u2013 interest &amp; maturity exempt.<\/p>\n<\/li>\n<\/ul>\n<h3 data-start=\"2626\" data-end=\"2666\"><span class=\"ez-toc-section\" id=\"Allowances_Still_Exempt_Limited\"><\/span><span style=\"color: #000080;\">Allowances Still Exempt (Limited)<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p data-start=\"2668\" data-end=\"2734\">Only allowances related to official duties remain exempt, such as:<\/p>\n<ul data-start=\"2736\" data-end=\"2909\">\n<li data-start=\"2736\" data-end=\"2756\">\n<p data-start=\"2738\" data-end=\"2756\">Travel on transfer<\/p>\n<\/li>\n<li data-start=\"2757\" data-end=\"2789\">\n<p data-start=\"2759\" data-end=\"2789\">Conveyance for official duties<\/p>\n<\/li>\n<li data-start=\"2790\" data-end=\"2815\">\n<p data-start=\"2792\" data-end=\"2815\">Daily allowance on tour<\/p>\n<\/li>\n<li data-start=\"2816\" data-end=\"2857\">\n<p data-start=\"2818\" data-end=\"2857\">Allowances to meet official expenditure<\/p>\n<\/li>\n<li data-start=\"2858\" data-end=\"2909\">\n<p data-start=\"2860\" data-end=\"2909\">Transport allowance for specially-abled employees. Most salary structuring allowances (HRA, LTA etc.) NOT allowed.<\/p>\n<\/li>\n<\/ul>\n<h3 data-start=\"2983\" data-end=\"3039\"><span class=\"ez-toc-section\" id=\"Deductions_Exemptions_NOT_Allowed_Under_New_Regime\"><\/span><span style=\"color: #000080;\">Deductions &amp; Exemptions NOT Allowed Under New Regime<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p data-start=\"3041\" data-end=\"3097\">Approximately 70+ deductions removed. Key disallowances:<\/p>\n<p data-start=\"3104\" data-end=\"3137\"><span style=\"color: #000080;\">Section 80C Investments : <\/span>LIC Premium, PPF, ELSS, EPF (employee contribution), Tuition fees &amp; Principal repayment of home loan<\/p>\n<p data-start=\"3252\" data-end=\"3291\"><span style=\"color: #000080;\">Home Loan (Major Restriction): <\/span><span style=\"font-size: 16px;\">No deduction for Interest on self-occupied property (Section 24(b)), Additional interest (80EE \/ 80EEA), and\u00a0 <\/span><span style=\"font-size: 16px;\">Principal repayment (80C).\u00a0No house property loss set-off.<\/span><\/p>\n<p data-start=\"3477\" data-end=\"3498\"><span style=\"color: #000080;\">Section 80D : <\/span><span style=\"font-size: 16px;\">Medical insurance premium \u2013 NOT allowed.<\/span><\/p>\n<p data-start=\"3549\" data-end=\"3570\"><span style=\"color: #000080;\">Section 80E: <\/span><span style=\"font-size: 16px;\">Education loan interest \u2013 NOT allowed.<\/span><\/p>\n<p data-start=\"3619\" data-end=\"3640\"><span style=\"color: #000080;\">\u00a0Section 80G : <\/span><span style=\"font-size: 16px;\">Donations including PM Relief Fund, National Defence Fund etc. \u2013 NOT allowed.<\/span><\/p>\n<p data-start=\"3728\" data-end=\"3775\"><span style=\"color: #000080;\">Salary-Related Exemptions Not Allowed like <\/span>HRA,\u00a0LTA,\u00a0Professional tax deduction,\u00a0Entertainment allowance (Govt employees),\u00a0Minor child allowance,\u00a0Children education allowance, and Most Section 10(14) special allowances<\/p>\n<p data-start=\"3963\" data-end=\"3997\"><span style=\"color: #000080;\">\u00a0Savings Account Interest : <\/span><span style=\"font-size: 16px;\">80TTA \/ 80TTB \u2013 NOT allowed.<\/span><\/p>\n<h3 data-start=\"4036\" data-end=\"4081\"><span class=\"ez-toc-section\" id=\"Business_Other_Deductions_Removed\"><\/span><span style=\"color: #000080;\">Business \/ Other Deductions Removed<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul data-start=\"4083\" data-end=\"4262\">\n<li data-start=\"4083\" data-end=\"4107\">\n<p data-start=\"4085\" data-end=\"4107\">80IA, 80IB, 80IAC etc.<\/p>\n<\/li>\n<li data-start=\"4108\" data-end=\"4146\">\n<p data-start=\"4110\" data-end=\"4146\">Additional depreciation (32(1)(iia))<\/p>\n<\/li>\n<li data-start=\"4147\" data-end=\"4178\">\n<p data-start=\"4149\" data-end=\"4178\">35 series research deductions<\/p>\n<\/li>\n<li data-start=\"4179\" data-end=\"4201\">\n<p data-start=\"4181\" data-end=\"4201\">10AA (SEZ deduction)<\/p>\n<\/li>\n<li data-start=\"4202\" data-end=\"4262\">\n<p data-start=\"4204\" data-end=\"4262\">Unabsorbed depreciation adjustment (subject to conditions)<\/p>\n<\/li>\n<\/ul>\n<h3 data-start=\"4269\" data-end=\"4299\"><span class=\"ez-toc-section\" id=\"Quick_Comparison_Snapshot\"><\/span><span style=\"color: #000080;\">Quick Comparison Snapshot<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"TyagGW_tableContainer\">\n<div class=\"group TyagGW_tableWrapper flex flex-col-reverse w-fit\" tabindex=\"-1\">\n<table class=\"w-fit min-w-(--thread-content-width)\" style=\"height: 361px;\" width=\"853\" data-start=\"4301\" data-end=\"4691\">\n<thead data-start=\"4301\" data-end=\"4339\">\n<tr data-start=\"4301\" data-end=\"4339\">\n<th class=\"\" data-start=\"4301\" data-end=\"4312\" data-col-size=\"sm\">Category<\/th>\n<th class=\"\" data-start=\"4312\" data-end=\"4325\" data-col-size=\"sm\">Old Regime<\/th>\n<th class=\"\" data-start=\"4325\" data-end=\"4339\" data-col-size=\"sm\">New Regime<\/th>\n<\/tr>\n<\/thead>\n<tbody data-start=\"4380\" data-end=\"4691\">\n<tr data-start=\"4380\" data-end=\"4422\">\n<td data-start=\"4380\" data-end=\"4401\" data-col-size=\"sm\">Standard Deduction<\/td>\n<td data-start=\"4401\" data-end=\"4411\" data-col-size=\"sm\">INR 50,000<\/td>\n<td data-start=\"4411\" data-end=\"4422\" data-col-size=\"sm\">INR 75,000<\/td>\n<\/tr>\n<tr data-start=\"4423\" data-end=\"4458\">\n<td data-start=\"4423\" data-end=\"4429\" data-col-size=\"sm\">80C<\/td>\n<td data-start=\"4429\" data-end=\"4441\" data-col-size=\"sm\">Allowed<\/td>\n<td data-start=\"4441\" data-end=\"4458\" data-col-size=\"sm\">Not Allowed<\/td>\n<\/tr>\n<tr data-start=\"4459\" data-end=\"4494\">\n<td data-start=\"4459\" data-end=\"4465\" data-col-size=\"sm\">80D<\/td>\n<td data-start=\"4465\" data-end=\"4477\" data-col-size=\"sm\">Allowed<\/td>\n<td data-start=\"4477\" data-end=\"4494\" data-col-size=\"sm\">\u00a0Not Allowed<\/td>\n<\/tr>\n<tr data-start=\"4495\" data-end=\"4530\">\n<td data-start=\"4495\" data-end=\"4501\" data-col-size=\"sm\">HRA<\/td>\n<td data-start=\"4501\" data-end=\"4513\" data-col-size=\"sm\">Allowed<\/td>\n<td data-start=\"4513\" data-end=\"4530\" data-col-size=\"sm\">\u00a0Not Allowed<\/td>\n<\/tr>\n<tr data-start=\"4531\" data-end=\"4588\">\n<td data-start=\"4531\" data-end=\"4559\" data-col-size=\"sm\">Home Loan (Self-Occupied)<\/td>\n<td data-start=\"4559\" data-end=\"4571\" data-col-size=\"sm\">Allowed<\/td>\n<td data-start=\"4571\" data-end=\"4588\" data-col-size=\"sm\">\u00a0Not Allowed<\/td>\n<\/tr>\n<tr data-start=\"4589\" data-end=\"4638\">\n<td data-start=\"4589\" data-end=\"4613\" data-col-size=\"sm\">Employer NPS (80CCD2)<\/td>\n<td data-start=\"4613\" data-end=\"4625\" data-col-size=\"sm\">Allowed<\/td>\n<td data-start=\"4625\" data-end=\"4638\" data-col-size=\"sm\">Allowed<\/td>\n<\/tr>\n<tr data-start=\"4639\" data-end=\"4670\">\n<td data-start=\"4639\" data-end=\"4661\" data-col-size=\"sm\">Official Allowances<\/td>\n<td data-start=\"4661\" data-end=\"4665\" data-col-size=\"sm\"><\/td>\n<td data-start=\"4665\" data-end=\"4670\" data-col-size=\"sm\"><\/td>\n<\/tr>\n<tr data-start=\"4671\" data-end=\"4691\">\n<td data-start=\"4671\" data-end=\"4682\" data-col-size=\"sm\">Gratuity<\/td>\n<td data-start=\"4682\" data-end=\"4686\" data-col-size=\"sm\"><\/td>\n<td data-start=\"4686\" data-end=\"4691\" data-col-size=\"sm\"><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<\/div>\n<h3><span class=\"ez-toc-section\" id=\"Old_Regime_VS_New_regime\"><\/span><span style=\"color: #000080;\"><strong>Old Regime VS New regime\u00a0<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p data-start=\"4727\" data-end=\"4761\">The New Regime is beneficial when:<\/p>\n<ul data-start=\"4763\" data-end=\"4877\">\n<li data-start=\"4763\" data-end=\"4787\">\n<p data-start=\"4765\" data-end=\"4787\">Deductions &lt; \u20b93\u20134 lakh<\/p>\n<\/li>\n<li data-start=\"4788\" data-end=\"4805\">\n<p data-start=\"4790\" data-end=\"4805\">No housing loan<\/p>\n<\/li>\n<li data-start=\"4806\" data-end=\"4843\">\n<p data-start=\"4808\" data-end=\"4843\">No heavy insurance\/ELSS investments<\/p>\n<\/li>\n<li data-start=\"4844\" data-end=\"4877\">\n<p data-start=\"4846\" data-end=\"4877\">Simplified compliance preferred<\/p>\n<\/li>\n<\/ul>\n<p data-start=\"4879\" data-end=\"4909\">Old Regime may be better when:<\/p>\n<ul data-start=\"4911\" data-end=\"5017\">\n<li data-start=\"4911\" data-end=\"4941\">\n<p data-start=\"4913\" data-end=\"4941\">Housing loan interest (\u20b92L+)<\/p>\n<\/li>\n<li data-start=\"4942\" data-end=\"4962\">\n<p data-start=\"4944\" data-end=\"4962\">High HRA exemption<\/p>\n<\/li>\n<li data-start=\"4963\" data-end=\"4989\">\n<p data-start=\"4965\" data-end=\"4989\">80C + 80D fully utilised<\/p>\n<\/li>\n<li data-start=\"4990\" data-end=\"5017\">\n<p data-start=\"4992\" data-end=\"5017\">Large donation deductions<\/p>\n<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Why_the_Old_Regime_May_Regain_Popularity\"><\/span><span style=\"color: #000080;\"><strong>Why the Old Regime May Regain Popularity<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Sharply increased allowance limits (education, hostel, meals, etc.).<\/li>\n<li>Higher perquisite thresholds aligned with inflation.<\/li>\n<li>Better fit for salaried individuals with structured CTC components.<\/li>\n<li>New regime becomes less advantageous where exemptions are maximized.<\/li>\n<li>Financial Express experts confirm that increased limits (e.g., education allowance from \u20b9200 to \u20b93,000) signal that the old regime will continue and remains practical for many taxpayers<\/li>\n<\/ul>\n<div>\n<h2><span class=\"ez-toc-section\" id=\"%E2%80%9CIncome%E2%80%9D_under_the_Income-tax_Act_2025\"><\/span><span style=\"color: #000080;\">\u201cIncome\u201d under the Income-tax Act, 2025?<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>A Thematic Explanation of Section 2(49) : Section 2(49) of the Income\u2011tax Act, 2025 (corresponding to erstwhile Section 2(24)) provides an inclusive definition of \u201cincome.\u201d An inclusive definition means the term is broad, non\u2011exhaustive, and extends beyond strictly earned receipts to cover <em>any<\/em> monetary or non\u2011monetary gains that increase a taxpayer\u2019s wealth\u2014unless expressly excluded.\u00a0To understand the scope, the inclusions may be viewed thematically:<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Ordinary_Commercial_Income\"><\/span><span style=\"color: #000080;\"><strong>Ordinary Commercial Income :\u00a0<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The most fundamental component of income continues to be receipts arising from routine commercial or investment activity. These include Profits and gains from business or profession, Dividends, Capital gains chargeable under section 67 and Profits of insurance businesses and co\u2011operative banking entities.\u00a0These categories represent traditional, periodic, or transactional economic gains forming the backbone of taxable income.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Employment_Income_and_Allowances\"><\/span><span style=\"color: #000080;\"><strong>Employment Income and Allowances<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Under the employment framework, income includes not only cash salary but also indirect and ancillary benefits Perquisites and profits in lieu of salary, Special allowances granted wholly or exclusively for performance of duties, Personal or cost\u2011of\u2011living allowances and Employees\u2019 contributions received by the employer towards PF, ESI and other welfare funds.\u00a0The intention is to ensure that total economic benefit arising from employment\u2014whether in cash or kind\u2014is taxable unless a specific exemption is provided.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Voluntary_Contributions\"><\/span><span style=\"color: #000080;\"><strong>Voluntary Contributions<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The Act treats voluntary contributions as income when received by Registered non-profit organisations, Specified institutions and funds,\u00a0 Universities, educational institutions and hospitals listed in the Schedules. Electoral trusts : The purpose is to bring donor-driven receipts within the income tax framework while allowing exemptions only where the statute specifically provides them (e.g., under Chapter on tax exemptions for charitable institutions).<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Benefits_Perquisites_Corporate_Anti-Avoidance_Measures\"><\/span><span style=\"color: #000080;\"><strong>Benefits, Perquisites &amp; Corporate Anti-Avoidance Measures<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Modern tax rules capture benefits capable of replacing or supplementing monetary income, such as Benefits or perquisites to directors or persons of significant interest, Benefits received via representative assessees, Non-monetary benefits taxable under business-income provisions and Fair market value of inventory in specified business reorganisations, conversions or distributions.<\/p>\n<p>These provisions serve an anti-avoidance function, ensuring that non-cash benefits\u2014often used in tax planning\u2014are not left out of the tax net.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Casual_Windfall_and_Speculative_Receipts\"><\/span><span style=\"color: #000080;\"><strong>Casual, Windfall and Speculative Receipts<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Income also includes winnings from Lotteries, Races (including horse races), Gambling and betting, Card games and games of chance and Other similar casual receipts.\u00a0These categories tax windfall gains, recognised on a gross basis without deductions.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Deemed_Income_Provisions\"><\/span><span style=\"color: #000080;\"><strong>Deemed Income Provisions<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The Act incorporates various deeming provisions, meaning certain receipts are treated as income even if they may not be income in the ordinary sense. Examples include Statutory business receipts, Transfer pricing adjustments, Value substitutions (FMV-based taxation) and Additions under specific anti-abuse sections.\u00a0\u00a0Here, legal fiction prevails over commercial principles, and such income is taxable purely because Parliament has said so.<\/p>\n<\/div>\n<h3><span class=\"ez-toc-section\" id=\"Summary%E2%80%94High-Level_Takeaways\"><\/span><span style=\"color: #000080;\"><strong>Summary\u2014High-Level Takeaways<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Salary &amp; perquisite valuation modernised after decades<\/li>\n<li>PAN reporting thresholds rationalised and simplified<\/li>\n<li>Strong movement toward digital compliance<\/li>\n<li>CBDC formally integrated<\/li>\n<li>Old tax regime gets a \u201csoft revival\u201d due to massive exemption hikes<\/li>\n<li>The Draft Rules reflect a complete modernization of tax administration<\/li>\n<\/ul>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>India\u2019s New Income-tax Act, 2025 \u2013 Effective 1 April 2026 The Income-tax Act, 2025 represents a structural rewrite of India\u2019s direct tax law. One of the most significant changes is the complete restructuring of the TDS and TCS framework, indicating a strong policy shift toward consolidation, simplification, and transaction-level monitoring.\u00a0 Below are the key highlights: &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[10426],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/31259"}],"collection":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/comments?post=31259"}],"version-history":[{"count":5,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/31259\/revisions"}],"predecessor-version":[{"id":31316,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/31259\/revisions\/31316"}],"wp:attachment":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/media?parent=31259"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/categories?post=31259"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/tags?post=31259"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}