The 2026 rules mark a shift toward higher exemption limits for several long-standing allowances, but also introduce steeper valuations for luxury perks like corporate vehicles.   1. Massive Boost to Education & Hostel Allowances After decades of stagnant limits, the government has significantly increased the tax-free thresholds for children’s education. Children’s Education Allowance:  Increased from ₹100/month to ₹3,000 per month  (per child, up to two children). Hostel Expe

This article provides a comprehensive comparison between Section 6 of the Income Tax Act, 1961 , and the newly structured Income Tax Act, 2025 , focusing on the evolution of residential status in India.   Determining the residential status of a taxpayer is the first step in identifying their tax liability in India. The transition from the Income Tax Act, 1961  (the "Old Act") to the Income Tax Act, 2025  (the "New Act") has simplified the structure while maintaining the core