New Income-tax Act 2025, set to come into effect from April 1

The new Income-tax Act, 2025, set to come into effect from April 1, 2026, marks a comprehensive overhaul of India's six-decade-old tax framework, with a focus on simplifying compliance, enhancing transparency, and rationalising exemptions for salaried taxpayers. 

While tax slabs and rates remain unchanged, the new regime significantly alters the way income, deductions, and disclosures are reported and verified, shifting emphasis towards more accurate and



detailed reporting.

Multiple income tax exemption limits are set to be increased under the new rules, particularly benefiting individuals opting for the old tax regime. 

One of the key changes pertains to House Rent Allowance (HRA). Currently, taxpayers residing in metro cities such as Mumbai, Delhi,. Kolkata, and Chennai can claim exemption of up to 50 per cent of their basic salary, while those in other cities are eligible for 40 per cent.