With the beginning of the new financial year from Wednesday, many significant income tax changes will come into effect which are expected to directly impact salaried employees .While speaking with The Tribune, CA Chhayank Thakur, Internal Audit Officer in Indian oil Corporation Ltd, said the new income tax brings about a paradigm shift in the taxation norms for salaried people, especially in the area of House Rent Allowance.The relaxation in the 50 per cent salary-based HRA exemption in cities like Hyderabad, Pune, Ahmedabad and Bengaluru is a welcome move, considering the representations made to the Central Board of Direct Taxes on the rising costs of rent in these cities, explains Thakur.”It is a progressive move, but the inclusion of high rent cities like Gurgaon, Faridabad and Noida is still required to be made. Further, the requirement to disclose the relationship with the landlord if the rent is above Rs 1 lakh annually in the ITR will only enhance transparency in the system,” he said.However, Thakur feels that the requirement may be particularly challenging in cases where the rent is paid to related parties, i.e., spouses or dependent family members, in the name of HRA, which may be curtailed in the near future.The new Income-tax Act 2025 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.Dr Shikha Bhatia, Associate Professor — Finance and Accounting Area, IMI Delhi, said the new Income Tax Act, effective from April 1, 2026, offers mixed outcomes for salaried professionals. The act simplifies filing procedures and widens the scope of allowances to cover HRA, meal vouchers, and children’s education so employees can expect a modest increase in take-home pay.”Though the filing procedures have been simplified but compliance has become more demanding. In essence, the reforms are designed to put a little more money in employees’ pockets, but with greater accountability attached. House Rent Allowance (HRA) is a telling example,” she said.She stated that more cities have been brought under the ‘metro’ category, offering higher exemptions to urban employees. But the mandatory disclosure of landlord PAN details makes it clear that benefits will only flow alongside transparency. It’s a classic case of balancing welfare with governance.Ruchita Sayani, CFO, Airpay, said with the revised tax slabs now making the new regime attractive for individuals earning up to Rs 12 lakhs annually, paying zero tax, a significant share of country’s 8.09 crore ITR filers are expected to re-evaluate their exemption-based strategies this assessment year.”Changes in HRA treatment deserve particular attention. Salaried taxpayers in urban centres must now ensure their rent arrangements are precisely documented and reported, as the Income Tax Department continues to ramp up data-matching capabilities across UPI, banking, and employer records,” Sayani said.