New Draft Rules Boost Old Tax Regime: HRA, Allowances Expanded

• New Income Tax Act, 2025 draft rules aim to simplify tax laws, reducing rules from 501 to 333 and forms from 399 to 190.
• The draft rules propose expanding cities eligible for 50% HRA exemption under the old regime to include Hyderabad, Pune, Ahmedabad, and Bengaluru.
• Education allowance for children increased from Rs 100 to Rs 3,000 per month per child (max two children), and hostel allowance from Rs 300 to Rs 9,000 per month per child.
• Transport allowance for disabled employees significantly raised, from Rs 3,200 to Rs 15,000 plus DA for metros and Rs 8,000 plus DA for other cities.
• Experts suggest these changes make the old tax regime more appealing for those with significant deductions, urging taxpayers to calculate their 'break-even deduction'.