Salary Hike 2026: Your in-hand salary will increase from April 1, benefit up to ₹ 80,000 due to new tax rules. Know what is the new Income Tax Code.

News India Live, Digital Desk: The new financial year (FY 2026-27) is bringing happiness for the employed people. The new Income Tax Code 2025 is being implemented by the Government of India by replacing the decades old Income Tax Act. Experts believe that with the combination of new tax slab and increased standard deduction, the annual savings of middle class employees can increase from ₹ 25,000 to ₹ 80,000.1. Income up to ₹ 12.75 lakh ‘Tax Free’ Under the new tax regime, there will be no tax on annual income up to ₹ 12 lakh. If standard deduction of ₹ 75,000 is added to this, then employees with salary up to ₹ 12.75 lakh will not have to pay a single rupee tax. This is considered to be the biggest relief for the middle class so far.2. Major changes in salary structure (Perquisites & Allowances) According to the new draft rules, the tax exemption limit on many facilities (Perquisites) provided by the employer has been increased: Meal Allowance: Now allowance up to ₹ 200 per meal will be tax free. Staff Loan: There will be no tax on interest-free loans up to ₹ 2 lakh taken from the employer. Gift Exemption: Gift vouchers up to ₹ 15,000 in a year now Will be out of the scope of tax.3. Big relief in HRA rules: Till now only four metros (Delhi, Mumbai, Kolkata, Chennai) were available to avail the benefit of 50% HRA exemption. Under the new rules, now cities like Bengaluru, Hyderabad and Pune can also be included in this list, which will increase the tax savings of the tenants living in these cities and will increase the in-hand salary.4. New Tax Slab: At a Glance (New Regime)Annual Income (₹)Tax Rate (%)0 – 4 LakhNil4 – 8 Lakh5%8 – 12 Lakh10%12 – 16 Lakh15%16 – 20 Lakh20%20 – 24 Lakh25%24 LakhAbove 30%5. Less TDS will be deducted, more money will come in your pocket. Since the tax liability is decreasing, companies will reduce the TDS (Tax Deducted at Source) deducted from your salary every month. This simply means that even without the company increasing your salary, the amount coming into your bank account every month (take-home) can increase by ₹ 2,000 to ₹ 6,500.