Govt notifies final rules, forms under new Income Tax Act
This story was originally published at 14:55 IST on 20 March 2026
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NEW DELHI – The government Friday notified the final rules and forms under the new Income Tax Act. The rules, which offer a detailed preview of the revamped tax framework under the Income-tax Act 2025, will be effective Apr. 1.
Parliament had enacted the Income Tax Act 2025, which replaces the Income Tax Act 1961. Last month, the government had released the draft rules and had sought public comments till Feb. 22. Under the new Income Tax Act, the number of forms has been reduced from 399 to 190.
Key provisions in the new forms and rules also apply to the old tax regime, which offers significant exemptions. Keeping up with changing socio-demographic and economic conditions, the government extended the 'house rent allowance' exemption to four more cities.
At present, taxpayers in big metros, including Chennai, Delhi, Kolkata and Mumbai, are eligible for a 50% HRA exemption, while taxpayers in other urban centres are eligible for a 40% exemption. The proposal expands the 50% benefit to Ahmedabad, Bengaluru, Hyderabad, and Pune. Other cities remain at 40%. End
Reported by Krity Ambey
Edited by Akul Nishant Akhoury
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