{"id":31634,"date":"2026-03-31T01:49:05","date_gmt":"2026-03-30T20:19:05","guid":{"rendered":"https:\/\/carajput.com\/blog\/?p=31634"},"modified":"2026-03-31T01:51:46","modified_gmt":"2026-03-30T20:21:46","slug":"allowances-perquisites-under-old-tax-regime-for-1-04-2026","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/allowances-perquisites-under-old-tax-regime-for-1-04-2026\/","title":{"rendered":"Allowances &#038; Perquisites under OLD tax regime for 1.04.2026"},"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-69e5ac8425d38\" 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-69e5ac8425d38\"  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\/allowances-perquisites-under-old-tax-regime-for-1-04-2026\/#Allowances_Perquisites_under_Income%E2%80%91tax_Rules_2026_for_OLD_tax_regime\" title=\"Allowances &amp; Perquisites under Income\u2011tax Rules, 2026 for OLD tax regime\">Allowances &amp; Perquisites under Income\u2011tax Rules, 2026 for OLD tax regime<\/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\/allowances-perquisites-under-old-tax-regime-for-1-04-2026\/#Critical_Insight_Allowances_Perquisites_under_Old_vs_New_Regime\" title=\"Critical Insight:\u00a0Allowances &amp; Perquisites under\u00a0Old vs New Regime\u00a0\">Critical Insight:\u00a0Allowances &amp; Perquisites under\u00a0Old 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-3\" href=\"https:\/\/carajput.com\/blog\/allowances-perquisites-under-old-tax-regime-for-1-04-2026\/#Income_tax_Strategic_View_for_Financial_Year_2026-27_under_Old_Regime\" title=\"Income tax Strategic View for Financial Year 2026-27 under Old Regime\u00a0\">Income tax Strategic View for Financial Year 2026-27 under Old Regime\u00a0<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-31635\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/03\/old-vs-new.jpeg\" alt=\"Allowances &amp; Perquisites\" width=\"800\" height=\"666\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/03\/old-vs-new.jpeg 800w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/03\/old-vs-new-300x250.jpeg 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/03\/old-vs-new-768x639.jpeg 768w\" sizes=\"(max-width: 800px) 100vw, 800px\" \/><\/h2>\n<h2><span class=\"ez-toc-section\" id=\"Allowances_Perquisites_under_Income%E2%80%91tax_Rules_2026_for_OLD_tax_regime\"><\/span><span style=\"color: #000080;\">Allowances &amp; Perquisites under Income\u2011tax Rules, 2026 for OLD tax regime<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<div>\n<p>The Income\u2011Tax Rules, 2026, notified by the <em>Central Board of Direct Taxes<\/em>\u00a0 and effective from 1 April 2026, do introduce major revisions in the valuation and exemption limits of certain allowances and perquisites, mainly under the OLD tax regime. <em>Central Board of Direct Taxes<\/em> has notified the Income\u2011Tax Rules, 2026, modernizing long\u2011pending limits for allowances and perquisites to reflect current economic realities.\u00a0Key Highlights:<\/p>\n<ul>\n<li>House Rent Allowance: 50% salary benefit extended to Bengaluru, Hyderabad, Pune &amp; Ahmedabad\u2014House Rent Allowance: 50% limit extended to more cities<\/li>\n<li>Children&#8217;s Education Allowance: INR 3,000 per month per child (up to 2 children)<\/li>\n<li>Hostel Allowance: INR 9,000 per month per child<\/li>\n<li>Interest\u2011free \/ concessional loans: Exempt up to \u20b9200,000<\/li>\n<li>Meal vouchers &amp; gifts: Higher permissible limits<\/li>\n<li>Motor car &amp; driver perquisites: Revised valuation norms (higher taxable value),\u00a0Meal vouchers, gifts, and motor car perquisites: Valuation limits updated to realistic levels<\/li>\n<\/ul>\n<p>These changes do not automatically reduce tax in all cases. Some perquisites (like a company car &amp; driver) may result in a higher taxable salary. Effective from 1 April 2026.<\/p>\n<h3 data-section-id=\"hknjtw\" data-start=\"3677\" data-end=\"3721\"><span class=\"ez-toc-section\" id=\"Critical_Insight_Allowances_Perquisites_under_Old_vs_New_Regime\"><\/span><span style=\"color: #000080;\">Critical Insight:\u00a0<\/span><span style=\"color: #000080;\">Allowances &amp; Perquisites under\u00a0<\/span><span style=\"color: #000080;\">Old vs New Regime\u00a0<\/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: 192px;\" width=\"783\" data-start=\"3723\" data-end=\"3977\">\n<thead data-start=\"3723\" data-end=\"3763\">\n<tr data-start=\"3723\" data-end=\"3763\">\n<th class=\"\" data-start=\"3723\" data-end=\"3736\" data-col-size=\"sm\">Particular<\/th>\n<th class=\"\" data-start=\"3736\" data-end=\"3749\" data-col-size=\"sm\">Old Regime<\/th>\n<th class=\"\" data-start=\"3749\" data-end=\"3763\" data-col-size=\"sm\">New Regime<\/th>\n<\/tr>\n<\/thead>\n<tbody data-start=\"3805\" data-end=\"3977\">\n<tr data-start=\"3805\" data-end=\"3854\">\n<td data-start=\"3805\" data-end=\"3818\" data-col-size=\"sm\">Allowances<\/td>\n<td data-col-size=\"sm\" data-start=\"3818\" data-end=\"3830\">Allowed<\/td>\n<td data-col-size=\"sm\" data-start=\"3830\" data-end=\"3854\">Mostly not allowed<\/td>\n<\/tr>\n<tr data-start=\"3855\" data-end=\"3907\">\n<td data-start=\"3855\" data-end=\"3869\" data-col-size=\"sm\">Perquisites<\/td>\n<td data-start=\"3869\" data-end=\"3894\" data-col-size=\"sm\">Structured valuation<\/td>\n<td data-col-size=\"sm\" data-start=\"3894\" data-end=\"3907\">Taxable<\/td>\n<\/tr>\n<tr data-start=\"3908\" data-end=\"3949\">\n<td data-start=\"3908\" data-end=\"3925\" data-col-size=\"sm\">Flexi Benefits<\/td>\n<td data-col-size=\"sm\" data-start=\"3925\" data-end=\"3936\">\u00a0Useful<\/td>\n<td data-col-size=\"sm\" data-start=\"3936\" data-end=\"3949\">\u00a0Limited<\/td>\n<\/tr>\n<tr data-start=\"3950\" data-end=\"3977\">\n<td data-start=\"3950\" data-end=\"3963\" data-col-size=\"sm\">Complexity<\/td>\n<td data-col-size=\"sm\" data-start=\"3963\" data-end=\"3970\">High<\/td>\n<td data-col-size=\"sm\" data-start=\"3970\" data-end=\"3977\">Low<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<\/div>\n<p data-start=\"3979\" data-end=\"4063\">For 2026, changes clearly revive old-regime attractiveness for salaried employees. This blog implies that all limits are \u201cnew exemptions\u201d or \u201cextra tax\u2011free benefits,&#8221; which is not fully accurate:<\/p>\n<ol>\n<li>Many figures shown are revised <em>valuation rules for perquisites: <\/em>Higher limits do not always mean lower taxes (especially for company car &amp; driver perquisites). In fact, taxable value increases in some cases.<\/li>\n<li>These benefits are largely relevant only under the OLD tax regime: house rent allowance,\u00a0education allowance, meal coupons, etc. are not available under the new regime.<\/li>\n<li>This is not a budget announcement:\u00a0These are rule\u2011based changes under the Income\u2011Tax Act, 2025, replacing outdated limits last revised decades ago.<\/li>\n<\/ol>\n<h3 data-section-id=\"hhx3nd\" data-start=\"2089\" data-end=\"2124\"><span class=\"ez-toc-section\" id=\"Income_tax_Strategic_View_for_Financial_Year_2026-27_under_Old_Regime\"><\/span><span style=\"color: #000080;\">Income tax Strategic View for Financial Year 2026-27 under Old Regime\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p class=\"isSelectedEnd\">These changes are part of the transition from the Income Tax Rules, 1962, to the Income\u2011Tax Rules, 2026, notified on 20 March 2026. The govt. has significantly enhanced allowances under the Old Regime, like<\/p>\n<ul>\n<li class=\"isSelectedEnd\">Children Education Allowance \u2192 INR\u00a0 3,000\/month<\/li>\n<li class=\"isSelectedEnd\">Hostel Allowance \u2192 INR 9,000\/month<\/li>\n<li class=\"isSelectedEnd\">Meal Allowance \u2192 INR 200 per meal<\/li>\n<li class=\"isSelectedEnd\">Gift Exemption \u2192 INR 15,000<\/li>\n<\/ul>\n<p>These are not cosmetic changes; they can shift the decision entirely.\u00a0Based on the latest changes:<\/p>\n<ul data-start=\"2152\" data-end=\"2252\">\n<li data-section-id=\"pz9gsh\" data-start=\"2152\" data-end=\"2202\">Under the New regime = default + simpler + lower tax<\/li>\n<li data-section-id=\"oysi37\" data-start=\"2203\" data-end=\"2252\">However, under the old regime, it was a planning-based tax-saving tool<\/li>\n<li data-section-id=\"oysi37\" data-start=\"2203\" data-end=\"2252\">As per recent developments, taxpayers must recalculate both before choosing. Tax planning under the OLD vs NEW regime becomes even more important from FY 2026\u201127.<\/li>\n<\/ul>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Allowances &amp; Perquisites under Income\u2011tax Rules, 2026 for OLD tax regime The Income\u2011Tax Rules, 2026, notified by the Central Board of Direct Taxes\u00a0 and effective from 1 April 2026, do introduce major revisions in the valuation and exemption limits of certain allowances and perquisites, mainly under the OLD tax regime. Central Board of Direct Taxes &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16],"tags":[10449],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/31634"}],"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=31634"}],"version-history":[{"count":2,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/31634\/revisions"}],"predecessor-version":[{"id":31637,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/31634\/revisions\/31637"}],"wp:attachment":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/media?parent=31634"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/categories?post=31634"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/tags?post=31634"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}