CA Umesh Sharma
Quick Summary
In an engaging conversation between Arjuna and Krishna, the article unpacks the major overhaul of Indias tax framework with the replacement of the Income Tax Rules, 1962 by the Income Tax Rules, 2026. It explores how the government has simplified terminology with the introduction of the "Tax Year,"
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FAQ :
The new Income Tax Rules, 2026 come into effect from April 1, 2026.
The terms 'Previous Year' and 'Assessment Year' are replaced by a single concept called 'Tax Year'.
The new rules add Hyderabad, Bengaluru, Pune, and Ahmedabad to the metro list, alongside Mumbai, Kolkata, Delhi, and Chennai, allowing for a 50% HRA exemption based on salary.
Children's Education Allowance increased from Rs 100/month/child to Rs 3,000/month/child, and Hostel Expenditure Allowance rose from Rs 300/month/child to Rs 9,000/month/child.
Yes, the perquisite value for company-provided accommodation has been reduced in metro cities (15% to 10%), larger cities (10% to 7.5%), and other areas (7.5% to 5% of salary).
Yes, the Digital Rupee (CBDC) has been officially included as a prescribed mode of electronic payment under the new Income Tax Rules, 2026.
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