Benefits for meal vouchers to EVs, higher HRA limit for 4 more cities, Pg17

Key Highlights:

• New Income-tax Rules, 2026 effective from April 1 include meal vouchers for employees under the new income tax regime.
• CBDT expanded the list of eligible cities for 50% HRA benefit to Bengaluru, Hyderabad, Pune, and Ahmedabad.
• Employees claiming HRA benefits must provide landlord details, with PAN required if aggregate rent exceeds Rs 1 lakh.
• Monthly taxable perquisite value for EVs used for both official and personal purposes is set at Rs 5,000 (plus Rs 3,000 for chauffeur) if employer bears expenses.

Detailed Insights:

• The Income-tax Act, 2025 introduced the concept of a ‘tax year’ as a 12-month period starting April 1, replacing the term ‘assessment year’.
• The updated perquisite rules now explicitly include electric vehicles within the concessional valuation slab for employer-provided motor cars.
• Meal vouchers up to Rs 200 per meal are now tax-exempt under the new income tax regime, potentially equating to Rs 4,400 monthly for one meal a day.
• Children's education allowance has been increased to Rs 3,000 per month per child (up to two children), and hostel expenditure allowance to Rs 9,000.

Key Concepts Involved:

• HRA (House Rent Allowance): Allowance given by an employer to an employee to meet the cost of rented accommodation.
• Perquisites: Non-cash benefits provided by an employer to employees, such as company cars or interest-free loans.
• CBDT (Central Board of Direct Taxes): A government body dealing with direct tax laws, policy, and planning in India.