Mumbai's Income Tax Office hosted a 'Prarambh 2026' event to explain the new Income Tax Act, 2025. The new law aims to simplify compliance, enhance transparency, and increase exemption limits for salaried taxpayers on several allowances.
The Office of the Principal Chief Commissioner of Income Tax, Mumbai, organised a Mega Outreach Programme to create awareness about the Income Tax Act, 2025, which came into effect from April 1, 2026. The programme was conducted on Tuesday under Prarambh 2026, a nationwide initiative of the Income Tax Department to help taxpayers and stakeholders understand the provisions of the new law and ensure a smooth transition from the earlier framework. More than 700 participants attended the event, including Chartered Accountants, representatives of trade and industry bodies, taxpayers, tax professionals and senior corporate executives. Among the prominent participants were Niranjan Hiranandani, Managing Director of Hiranandani Group; Raamdeo Agrawal, Chairman of Motilal Oswal Group; Arjun Kapoor; and CS Nanda, former President of The Institute of Chartered Accountants of India (ICAI), according to an official release.
Speaking on the occasion, Alok Kumar, Principal Chief Commissioner of Income Tax, Mumbai, said that the new Act has been designed to make tax laws easier to understand and compliance more convenient for taxpayers. He stated that decades of amendments and complex provisions had made the earlier framework difficult for ordinary taxpayers to navigate and that the new law seeks to simplify compliance through a modern and digitally enabled structure. He added that awareness programmes are being organised across Mumbai to assist taxpayers during the transition period.
Hiranandani said the new Income Tax framework would promote transparency, simplify compliance by removing multiple complex provisions, and strengthen trust between citizens and the government. He added that the growth-oriented and digitally transparent tax system would support investment, improve ease of doing business and living, and contribute to India's economic prosperity and the vision of an Aatmanirbhar Bharat, the release stated.
Key Features of the New Income-tax Act
Meanwhile, the new Income-tax Act marks a comprehensive overhaul of India's six-decade-old tax framework, with a focus on simplifying compliance, enhancing transparency, and rationalising exemptions for salaried taxpayers. While tax slabs and rates remain unchanged, the new regime significantly alters the way income, deductions, and disclosures are reported and verified, shifting emphasis towards more accurate and detailed reporting.
Increased Exemptions for Salaried Taxpayers
Multiple income tax exemption limits are set to be increased under the new rules, particularly benefiting individuals opting for the old tax regime. The new act provides for a substantial increase in exemptions related to children's education. The existing allowance of Rs 100 per child per month is set to be raised to Rs 3,000 per child per month. Hostel expenditure allowance will see a sharp jump from Rs 300 per child per month to Rs 9,000 per child per month. These benefits will continue to apply to a maximum of two children and remain available under the old tax regime.
Under the new Income Tax Rules, 2026, the tax-exempt limit for employer-provided meals has been increased from Rs 50 per meal to Rs 200 per meal. This change could translate into an annual tax benefit of up to approximately Rs 1.05 lakh, depending on usage and employer policies, and is expected to be available under both old and new tax regimes.
The exemption limit on gifts received from employers is also proposed to be increased threefold, from the current Rs 5,000 annually to Rs 15,000 per year, with this benefit applicable across both tax regimes.
Changes on the Compliance Front
On the compliance front, a major procedural change includes the replacement of Form 16 with a new system-generated Form 130, aimed at improving accuracy and standardisation in tax reporting. Additionally, expanded use of PAN and tighter reporting norms will require taxpayers to disclose financial information more comprehensively.
It is believed that these revisions are designed to align exemption limits with current cost structures and inflationary trends, which have rendered many existing thresholds outdated. The broader objective is to ease the tax burden on salaried individuals while modernising the tax administration system. (ANI)
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