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A new income tax regime is set to come into effect starting April 1, 2026. This will have a direct impact on your salary, the perks provided by your company, and your 'take-home' income. From now on, the calculation will not be limited to your basic salary alone; it will encompass company-provided housing, official cars, gifts, and various allowances.

Tax Now Applicable on the 'Full Package,' Not Just 'Salary'
Until now, many individuals have focused solely on their basic salary. However, under the new regulations, the entire CTC (Cost to Company) will be taken into consideration. This means that perks and facilities previously received "free of cost" will now become taxable.

Retirement Fund Contributions Exceeding ₹7.5 Lakhs? Tax is Inevitable
If your company contributes more than ₹7.5 lakhs annually to your PF (Provident Fund), NPS (National Pension System), or other retirement funds, the excess amount will be subject to taxation. Furthermore, the interest accrued on this excess amount will also be taxable.

**Company-Provided Housing Is No Longer 'Free'**
If your company provides you with residential accommodation, its taxable value will now be determined using a specific formula: Major Cities: 10% of salary; Mid-sized Cities: 7.5% of salary; Small Cities: 5% of salary. This calculated amount will be added to your total income for tax assessment.

Rented Accommodation? Rules Have Become Stricter
If your company provides you with accommodation by renting a property on your behalf, the taxable value will be the lower of the following two figures: the actual rent paid by the company, or 10% of your salary.

Official Cars: No Longer Just a 'Luxury,' Now a Taxable Benefit
If you utilize your official vehicle for personal purposes, you will now incur a financial liability. The taxable value is fixed as follows: Small Cars: ₹5,000 per month; Large Cars: ₹7,000 per month; Driver Services: an additional ₹3,000 per month. This amount will be added to your salary, thereby increasing your overall tax liability.

Limits Set for Gifts
Any gift valued above ₹15,000 is now taxable. Gifts received from your employer will remain tax-free up to a cumulative value of ₹15,000 per annum; however, any amount exceeding this limit will be fully subject to taxation.

Office Meals Up to ₹200 Remain Tax-Free
Office-provided meals have also been brought under the purview of these new regulations. Meals up to ₹200 are tax-free; amounts exceeding this limit may be subject to tax.

Subsidized Loans from Your Employer? Now, These Are Taxable Too
If your company provides you with a low-interest loan, the difference relative to the prevailing SBI interest rate will be subject to tax. However, loans up to ₹2 lakh remain tax-free, and exemptions apply in cases of medical emergencies.

Scrutiny on Expenses Related to Tax-Free Income
If a portion of your income is tax-free, new regulations will now apply to the expenses associated with it. A 1% formula will be implemented.

Tightening the Net on Foreign Digital Companies
If a foreign company generates revenue exceeding ₹2 crore or has a user base of over 300,000, it will be required to pay taxes in India.

Changes to Form 16 and Salary Slips
Following these changes, new components will appear on your salary slip. Consequently, your "take-home salary" may be affected.

What Should Taxpayers Do?
Understand your salary structure, consult with your HR department, and—most importantly—ascertain the monetary value of any perks (such as a company car, housing, or funds) you receive; failure to do so could result in a sudden increase in your tax liability.

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