India is set to witness a landmark shift in its fiscal policy as the new Income Tax Rules come into effect from April 1, 2026. The Ministry of Finance released the draft rules on Friday, highlighting a massive simplification of the existing tax structure. The total number of tax rules has been slashed from 399 to 190, aiming to make the filing process user-friendly and transparent for both individuals and businesses.

While tax slabs remain unchanged for the FY 2026-27, taxpayers have much to cheer about in terms of increased exemptions. Tax-free meal card limits have been raised from ₹50 to ₹200 per meal (under the old regime), and corporate gift limits have tripled to ₹15,000. Significant relief has been provided for parents, with children’s education allowance hiked to ₹3,000 per month and hostel allowance to ₹9,000 per month.

In a major move for urban renters, cities like Bengaluru, Pune, Hyderabad, and Ahmedabad have been added to the ‘Metro’ list, allowing residents to claim 50% HRA exemption. Additionally, the deadline for filing ITR-3 and ITR-4 has been extended to August 31. These structural changes, combined with pre-filled data and simplified forms, are expected to reduce the compliance burden significantly while providing real economic relief to the middle class.