Hyderabad gets 50% HRA tax exemption from April 1
HYDERABAD: The Centre has notified new Income Tax Rules, 2026, clearing the way for implementing the Income Tax Act, 2025, which replaces the six-decade-old Income Tax Act, 1961. The rules will come into force from April 1, 2026, offering relief to salaried individuals and general taxpayers.
HRA tax relief extended to eight major cities
The government has expanded the list of cities eligible for 50% exemption on House Rent Allowance (HRA) from four to eight. Until now, the benefit was limited to Delhi, Mumbai, Kolkata and Chennai.
Under the new rules, Hyderabad, Pune, Ahmedabad and Bengaluru have been added to this list. For residents of other cities and towns, the exemption limit remains 40%.
To claim the exemption, taxpayers must disclose rent agreement details between tenant and landlord. The benefit applies only to those opting for the old tax regime; it is not available under the new tax regime.
Higher PAN thresholds for transactions introduced
The new rules revise limits for mandatory Permanent Account Number (PAN) disclosure across several transactions:
- Bank transactions: PAN is mandatory if cash deposits or withdrawals in a financial year reach ₹10 lakh or more, whether in one instance or multiple transactions. Earlier, PAN was required for transactions above ₹50,000 in a day.
- Property transactions: PAN is required if the value of purchase, sale, gift or joint development agreements exceeds ₹20 lakh. The earlier threshold was ₹10 lakh.
- Vehicle purchases: PAN must be submitted for any motor vehicle purchase, including two-wheelers, if the price exceeds ₹5 lakh. Earlier, two-wheelers were exempt, while PAN was mandatory for cars irrespective of price.
- Hotels and events: PAN is required for payments exceeding ₹1 lakh to hotels, restaurants, convention centres or event management firms.
Electric vehicles treated like small cars for perquisites
Under the revised rules, when employees use electric vehicles for both personal and official purposes, the valuation of perquisites will be calculated on par with conventional cars with engine capacity not exceeding 1.6 litres.
