Big HRA & Education Allowance Hikes
2 min read
Big HRA & Education Allowance Hikes
So the taxman is finally giving middle-class wallets some breathing room. The Income Tax Department just released the Draft Rules for 2026. The goal? Fix outdated limits. In fact, many of these caps have stayed the same since 1962. Plus, the new rules align with the rising cost of living in India today.
Frequently Asked Questions (FAQs)
Which cities are newly added to the HRA metro list for 2026?
So the four new cities are Hyderabad, Ahmedabad, Pune, and Bengaluru. Because of this, employees in these cities can claim a 50% HRA exemption of their basic salary.
What is the new limit for childrenu2019s education allowance?
In fact, the proposed limit is u20b93,000 per month per child. Consequently, this is a massive 30-fold increase from the current u20b9100 limit.
When will the Income Tax Draft Rules 2026 come into force?
But the government plans to implement them from the next financial year starting April 1, 2026. Specifically, they will work in sync with the new Income Tax Act, 2025.
