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New Delhi. The Union Finance Ministry has notified and published the draft of Income Tax Rules-2026 in the e-Gazette on 20 March 2026. This Income Tax Act will come into effect from April 1, 2026. The new rules will replace the 1961 rules. Let us know what is changing from April 1?

1-Big change is happening in HRA

The Income Tax Rules retain the proposed framework for HRA exemption applicable to salaried taxpayers. Under the new rules, eight cities – Mumbai, Kolkata, Delhi, Chennai, Hyderabad, Pune, Ahmedabad and Bengaluru – will be eligible for the higher exemption limit of 50 per cent of salary. Earlier there were only three cities in this area. At all other places the discount limit will remain at 40 percent. Let us tell you, this exemption will be available only under the old tax regime.

2- Expenses to children’s education

The per month rebate on children’s education has been increased from Rs 100 to Rs 3000. At the same time, the hostel expenditure on a child has also been increased from Rs 300 to Rs 9000 per month. This exemption will also be available under the old tax regime.

3- Corporate/company car

A car with 1.6 liter engine received from the company for office work or personal work will be taxed at Rs 8000 per month. At the same time, a tax of Rs 10,000 per month will be levied on vehicles with more than 1.6 liter engine. This rule is in both the new and old tax laws.

4- Meal Cards

In the new rules, the limit of meal cards has also been increased from Rs 50 to Rs 200. Now there will be no tax on corporate meal cards up to Rs 200. However, this exemption is in the old tax regime only.

5- Coupons and Gift Cards

Under the old tax regime, exemption on corporate gift cards, gift certificates and coupons up to Rs 15,000 will be available every year.

6- Sector Allowance

The limit of allowance for employees working in any transport system has been increased from Rs 10,000 or 70 percent of the allowance to Rs 25,000 or 70 percent of the allowance.

7- Increase in security transaction tax

STT on futures has been increased from 0.02 percent to 0.05 percent. At the same time, the tax on options transactions has been increased by 0.1 percent to 0.15 percent. This tax will be applicable on every purchase and sale.

8- Tax will be imposed on buyback

Every amount received through buyback will be taxed from April 1, 2026. From the first of next month, corporate promoters will have to pay 22 percent tax and non-corporate promoters will have to pay 30 percent tax under ‘differential buyback tax’.