Revamp in Tax Acts: Simpler Language and Enhanced HRA Benefits Announced

The Central Board of Direct Taxes announced new rules for the Income-tax Act, 2025, focusing on enhancing house rent allowance benefits for salary earners. However, a mandatory disclosure of the landlord-tenant relationship is now required.

The updated Income-tax Rules, 2026, effective from April 1, bring forward a simplified direct tax legislation approved by Parliament last year. The new rules overhaul the six-decade-old Income Tax Act, 1961, reducing sections and chapters significantly to make the language more accessible while introducing new tables and formulas.

The rules strengthen regulations around capital gains and stock exchanges while maintaining critical disclosure mechanisms. Salaried individuals in major cities will see higher HRA exemptions. The scope of responsibility is expanded for auditors in tax credit claims and prevents PAN duplication.