Income Tax Calculator FY 2025-26: Tax on ₹15L, ₹30L and ₹50L Income Under Old vs New Regime

India’s income tax system currently allows individuals to choose between two tax structures: the Old Tax Regime and the New Tax Regime. The old regime offers a wide range of deductions and exemptions, while the new regime provides lower tax rates but removes most deductions. Over the past few years, the government has gradually made the new regime more attractive, and today nearly 88% of taxpayers have shifted to it, according to the Central Board of Direct Taxes (CBDT).

At the same time, India’s tax framework for salaried employees may soon see further changes. The Draft Income Tax Rules 2026, proposed to replace or update parts of the existing Income-tax Rules 1962, include several revisions that could affect how salary components, allowances, and employee perquisites are taxed.

If these proposals are approved by Parliament in their current form, they could alter the tax treatment of benefits such as House Rent Allowance (HRA), company car perks, interest-free loans, meal benefits, and employee gifts. For middle-class salaried individuals earning between ₹10 lakh and ₹30 lakh annually, these changes may significantly affect taxable income and final tax liability.

Major Changes Proposed in the Draft Income Tax Rules 2026

Under current tax rules, employees who receive a company-provided vehicle must include a fixed value of this benefit as a taxable perquisite. The new draft rules propose an updated valuation method.

methods to better reflect:

• Actual vehicle usage
• Fuel expenses
• Personal vs official usage

For the employees who have higher compensation packages, especially those who earn above ₹20 lakh annually, it is believed that the tax payable will increase by a small amount, as the tax value of the benefit will increase slightly. According to tax professionals, the impact of this will be seen by the senior management and the high-income corporate executives, while entry-level and mid-level employees are expected to be unaffected.

Interest-Free or Concessional Loans

Interest free or concessional loans are a common employee benefit offered by many companies for purposes such as housing, vehicle purchases, or other personal financial needs. Under the current tax framework, the value of this benefit is treated as a taxable perquisite and is calculated based on the difference between the interest actually paid by the employee and the prevailing lending rate of State Bank of India (SBI) for similar loans. However, the draft tax rules propose a revision to this benchmark methodology to better reflect realistic market interest rates. If implemented, this change could increase the taxable value of such benefits, particularly for employees who receive large employer-provided loans at low or zero interest rates.

Here is the link for Interest Rates Perquisite Calculation from SBI

Meal and Refreshment Benefits (Sodexo / Pluxee Cards)

Benefits related to meals and refreshments, such as meal vouchers distributed by cards provided by companies like Pluxee, formerly known as Sodexo, are popular among employers who offer these as part of the compensation package for their employees. As per the tax regulations, currently, the tax benefit for these meal vouchers is available at an exemption limit of ₹50 per meal. However, under the draft tax regulations, the limit is to be reviewed in light of the increase in inflation and the shift in work culture with the advent of flexible and hybrid work options. If the limit is raised, it would be beneficial for the employee to receive a higher amount without having to pay tax on it.

Gifts and Festival Vouchers

Gifts and festival vouchers are commonly provided by employers during celebrations such as Diwali and Eid. Under current tax rules, gifts up to ₹5,000 per year are tax-exempt. Draft rules may revise this threshold or clarify valuation methods for digital vouchers and reward points in compensation packages for modern employee benefits.

Children Education and Hostel Allowances

The draft rules propose clarifications and possible revisions so that these benefits better reflect the actual cost of education, which has increased significantly in urban India.

Existing rules provide small tax exemptions for education-related allowances:

• Children education allowance
• Hostel allowance

HRA Calculation Example: CTC ₹20 Lakh vs ₹30 Lakh

Below is an illustrative comparison of HRA calculations under the existing rules (1962) and the proposed Draft Rules 2026.

Tax Impact Example: CTC ₹20 Lakh and ₹30 Lakh

What This Means

• A person earning ₹20 lakh annually could save over ₹30,000 in tax.
• Someone earning ₹30 lakh could see tax savings close to ₹47,000.

Why These Changes Matter for the Middle Class

Most important to understand is that the major changes are particularly significant for India’s salaried middle class, which has long advocated for tax relief and updated deduction limits.

According to government data from the Income Tax Department of India, the country has more than 70 million individual income-tax filers, a substantial portion of whom belong to the salaried middle-income group. For these taxpayers, even modest revisions in allowances or exemptions can meaningfully influence their disposable income. With urban living costs rising steadily, especially in areas such as housing, education, and healthcare, policy reforms that expand tax-free allowances could provide much-needed financial relief and improve overall household financial stability

Growth in Individual Income-Tax Filers in India

Source: Income Tax Department of India

Growth of Middle-Income Taxpayers by Income Bracket

Source: Income Tax Department of India