Now only a few days are left for the beginning of the new financial year (2026-27). From April 1, 2026, not only the calendar will change, but your salary structure is also going to change. New rules are going to be implemented under the Income Tax Act, 2025, which can have a direct impact on your salary structure and your ‘in-hand’ salary. Income tax experts say that even if your company does not increase your total package (CTC), the allowances and deductions appearing in your salary slip may change from April 1. Let us understand how these new rules will affect your finances.
Why will the salary structure change?
Under the new rules, the government has tightened the rules related to evaluation of allowances, reimbursements and perks offered by companies. Earlier, companies used to split the salary into different allowances to reduce tax liability; But now, most of these benefits have a fixed taxable value. This means that now a larger part of your salary can be counted as taxable income.
Your ‘in-hand’ salary may reduce
According to the new labor codes that have now been implemented across the country, it is now necessary that the basic salary of any employee should be at least 50% of his total CTC (cost to the company). By increasing your basic salary, your contribution to your Provident Fund (PF) and gratuity will also increase. Although this will definitely increase your savings for the future, the actual salary you receive every month may reduce.
Company perks will now be taxable
If your company gives you certain types of perks, now you will have to pay tax on them. Personal use of office car and driver’s salary will now be added to your taxable income. Apart from this, houses provided by the company, servants for domestic work, or payment of electricity and water bills by the company will also now come under the ambit of tax. Benefits like children’s school fees (if they exceed a certain limit), company credit cards, club memberships and paid holidays will also now clearly come under the tax net.
old vs new tax system
From April 1, it will become even more important to decide which tax system makes the most sense for you. In the new tax regime, tax rates are lower; However, exemptions like exemption under HRA and Section 80C are not available in this. If your salary structure is simple, then this system is a better option. On the contrary, if your salary includes various allowances and you invest (like in LIC, PPF, etc.), the old tax regime may still prove helpful in saving tax.
