New Income Tax Rules: The government has notified new income tax rules. According to the new rules, salaried individuals in large cities will receive a higher HRA exemption.
New Income Tax Rules: The government has notified new income tax rules, the Income Tax Rules 2026. These rules have made changes to everything from HRA to capital gains. Those living and working in large cities will benefit more from the HRA exemption. Tenants will also have to disclose their relationship with the landlord. These new rules will come into effect on April 1, 2026 (financial year 2026-27). Their impact will be reflected in the ITR filed in July 2027.
Learn what changes have been made?
1. HRA exemption for salaried employees
Under the new rules, the rules for House Rent Allowance (HRA) exemption for salaried employees have been clarified.
Employees living in eight major cities in India will now receive an HRA exemption of up to 50% of their salary. These cities are Delhi, Mumbai, Kolkata, Chennai, Hyderabad, Pune, Ahmedabad, and Bengaluru.
For those living outside these eight cities, the HRA exemption limit will remain at 40%.
2. Relationship with landlord must be disclosed
To prevent tax evasion, the government has increased transparency. Under the new Income Tax rules, taxpayers will now be required to disclose their relationship with their landlord in Form 124.
HRA exemption will still be calculated based on the lowest of three factors: actual HRA received, rent paid (10% of salary), and 50% or 40% of salary.
3. Stricter rules for stock exchanges
The government has also made some changes regarding stock exchanges in the new Income Tax rules. To be considered a recognized stock exchange for derivatives trading (F&O), exchanges will now have to comply with strict conditions:
Exchanges must compulsorily capture client data such as PAN and Unique Client ID.
A complete audit trail of all cash and derivatives transactions must be maintained for 7 years.
Exchanges must submit monthly statements to the Director General of Income Tax (Systems) by the 15th of every month.
4. Clarification on Asset Holding Period
The rules regarding the holding period (the period of holding an asset, i.e., short-term or long-term) for calculating capital gains have been clarified:
If you have converted bonds or debentures into shares, the holding period will be calculated from the date of purchase of the original instrument.
If the immovable property is declared under the Income Declaration Scheme (IDS) 2016, the holding period will be calculated from the date of the registered deed. For other assets, the holding period will be calculated from June 1, 2016.
What is the purpose of the new rules?
The government believes that the new Income Tax Rules 2026 will increase transparency and clarify the tax system. However, this will also increase the scope of compliance for taxpayers and companies. The government’s focus is on preventing tax evasion and modernizing the system.
The post New Income Tax Rules: Government has notified the Income Tax Rules 2026; Know what will change first appeared on informalnewz.
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