Good news for employed people, 5 big changes in salary increase from April 1, know new tax rules –

Tezzbuzz Desk- If you are employed, then there can be a big relief for you under the New Income Tax Act 2026 proposed by the Central Government. Due to this new tax proposal, the TDS (Tax Deducted at Source) deducted from your salary every month will reduce and your take-home salary may increase. Let us know about those 5 major changes, which will directly benefit your pocket.

Income up to Rs 12 lakh now tax-free (New Tax Regime)

The government has increased the tax rebate limit to ₹60,000 under the new tax regime. Its direct effect is that now a person with annual income up to ₹ 12,00,000 will not have to pay any tax. This can save the middle class from ₹ 25,000 to ₹ 50,000 annually. This means that due to increase in tax-free income limit, your take-home salary will increase effectively.

Big change in HRA rules (for Old Tax Regime)

A major change is proposed in HRA (House Rent Allowance) for employees opting for the old tax regime. Now Bengaluru, Hyderabad, Pune and Ahmedabad have also been included in the category of metro cities. Employees living in these cities will now be able to claim HRA up to 50% of basic salary. (Earlier it was 40%) This change will reduce the taxable income of employees living in these cities and increase the take-home salary.

Big jump in children’s education and hostel allowance

Relief is also proposed for employees with student children:

Children Education Allowance

• Earlier there was tax-free up to ₹100 per month
• Now it is being increased to ₹3000 per month per child

Hostel Allowance

• Earlier it was up to ₹300 per month
• Now it is being increased to ₹9000 per month

These increases could result in tax savings of more than ₹50,000 annually.

Increase in Standard Deduction

Standard deduction for salaried employees is available in both the tax regimes (Old and New).
Now there is talk of increasing it from ₹75,000 to ₹1,00,000. This increase will directly reduce your taxable income by another ₹25,000, which will help in tax savings.

Office gifts now tax-free up to ₹15,000

Earlier, gifts or vouchers received from the company were taxed above ₹ 5,000. Now according to the new rules: Office gifts up to ₹ 15,000 will be tax-free. This means less worries about tax on Diwali dues, reward vouchers or gifts.

How will these changes affect your purse?

According to tax experts, all these proposed changes could increase the annual take-home salary of an average salaried person by ₹25,000 to ₹80,000. However, the exact benefit will depend on which tax regime you choose. What is your salary structure (Basic, HRA, Allowances etc.).

The proposed changes under the New Income Tax Act 2026 can prove to be a good news for employed people. Improvements in tax-free limit, HRA, standard deduction and allowances can increase your take-home salary and also enable budget savings. Now it has become necessary to make your tax planning even smarter!