From April 1, a major change related to the country’s tax system is going to come into effect, in which the new Income-Tax Act, 2025 will replace the existing Income-Tax Act, 1961. Although there is no change in tax slabs or rates, rules related to ITR filing, use of PAN, HRA claims and income reporting will become more stringent and transparent than before. Therefore, it is important for every taxpayer to understand these new rules in time to avoid any possible problems in future.
new income tax law
The Income Tax Act, 2025 is now going to come into force, which will replace the Income Tax Act, 1961. According to the government, this is not just a change in the way tax is levied, but the entire law has been completely rewritten. The good news is that there has been no change in the tax slabs or rates. This means you won’t have to pay much tax; However, you now have to provide more detailed information about your income, deductions, salary, capital gains and disclosures.
Big benefits on meal card
Under the new rules, salaried employees will get higher tax benefits on meal coupons, vouchers or cards (like Sodexo, Pluxee or Zaggle). Employees can now avail tax-free meal benefits up to ₹1 lakh annually (provided their employer offers this facility).
HRA rules: stricter and more comprehensive
Changes have also been made in the rules related to House Rent Allowance (HRA):
50% HRA exemption will no longer be limited to Mumbai, Delhi, Kolkata and Chennai only. Now Bengaluru, Hyderabad, Pune and Ahmedabad will also be included in it. For all remaining cities, the 40% rule will remain applicable.
New rule:
To claim HRA, it will now be necessary to provide landlord information in Form 124. The purpose of this step is to stop false or inflated rent claims.
Strict rules related to PAN
Permanent Account Number (PAN) will now be required for more types of transactions—such as buying or selling of vehicles, large expenses, etc. Conversely, reporting requirements for smaller transactions will be reduced. If correct information is provided, the tax refund process will be completed faster; If there is any kind of disturbance, it may get delayed.
Changes in filing ITR
Now, there will be no need to fill any separate form to choose between the new and old tax systems; This option can be selected directly inside the ITR. Even people who own two residential properties will be able to use this simple form (subject to certain conditions).
What hasn’t changed?
tax slab
tax rates
No new taxes have been imposed
Existing rights and responsibilities will remain the same
Objectives of the new law
This new law pays special attention to:
Assessment without face to face
Following rules through digital means
reduce human interference
less controversy
Harmonizing tax laws to global standards
Digital mediums—such as email, cloud storage, and smartphones—are now explicitly brought under scrutiny.
main deadlines
The law will come into force: April 1, 2026 (FY 2026-27)
First ITR filing: To be filed in 2027
However, rules related to salary, TDS, PAN etc. will come into effect immediately.
impact of labor code
Along with the new tax rules, the Labor Code (which will come into effect from November 21, 2025) will also have an impact on the salary structure.
Under this, it is necessary that the basic salary be at least 50% of the total salary.
This change may alter your take-home salary and tax planning strategies.
