New Income Tax Rules 2026: HRA, perks and allowances explained for salaried taxpayers
1/7
Income Tax Rules 2026 notified
The government notified the Income Tax Rules, 2026 on March 20, 2026. These rules introduce several changes impacting salaried taxpayers, including revisions in HRA, perquisites and allowances.
2/7
Top 6 changes at a glance
The prominent changes include:
● Motor car perquisite (company vehicle)
● Interest-free or concessional loans to employees
● Meal and refreshment benefits
● Children education and hostel allowances
● More House Rent Allowance (HRA) benefit for new cities
● More tax benefits for gifts and festival vouchers
● Motor car perquisite (company vehicle)
● Interest-free or concessional loans to employees
● Meal and refreshment benefits
● Children education and hostel allowances
● More House Rent Allowance (HRA) benefit for new cities
● More tax benefits for gifts and festival vouchers
3/7
Impact of new tax rules
The table above by CA Avinash Rao shows the impact of key changes introduced under Income Tax Rules, 2026, on salaried taxpayers.
Amazon Top Deals
POWERED BY
Crompton Ozone 75 Litres Desert Air Cooler for home | Large & Easy Clean Ice Chamber | 4-Way Air Deflection | High Density Honeycomb Pads | Everlast Pump | Auto Fill| 3 Year Brand Warranty
₹9,798Buy Now43%
OFF
LG 32 L Convection Microwave Oven (MC3286BRUM, Black, 360° Motorised Rotisserie for Bar-be-queing, 301 Auto Cook Menu, Stainless steel cavity, Indian Cuisine, Tandoor Se, Steam Clean & Diet Fry)
₹19,340Buy Now19%
OFF
4/7
Simplified compliance and new forms
The new rules aim to bring clarity in definitions and streamline compliance through rationalised forms. Legacy forms such as Form 26AS and Form 16 will be replaced with Form 168 and Form 130.
5/7
Motor car perquisite changes
The rules revise the valuation of taxable perquisites for employer-provided motor vehicles. These changes will apply to both old and new tax regimes, as this pertains to the valuation of perks related to salary income.
6/7
Expanded HRA benefits
House Rent Allowance (HRA) rules have been revised to include more cities such as Hyderabad, Pune, Ahmedabad and Bengaluru, allowing more taxpayers to qualify for higher HRA tax exemption.
7/7
Other allowance changes
The new rules also modify tax treatment for meal benefits, children’s education and hostel allowances, and gifts or festival vouchers. Overall, the framework aims to balance taxpayer relief with stricter compliance and modern payroll alignment.