Budget 2026: Major Income Tax Overhaul, New Rules for 80C, HRA-LTA Under New Act

• Budget 2026 will introduce significant income tax changes, revising the new Income Tax Act of 2025, not the old 1961 Act.
• The 1961 Income Tax Act will be abolished from April 1, 2026, replaced by the 2025 Act, which received presidential assent in August 2025.
• The new Act will organize tax exemptions (like 80C, 80D, HRA, LTA) under a schedule system instead of sections, simplifying the law.
• HRA and LTA exemptions will continue, but their rules will be part of fixed schedules, offering flexibility for future amendments.
• Home loan interest exemption for self-occupied property and the new tax regime (Section 115BAC) will remain, with clearer conditions and adapted to the new law.

Why It Matters: Budget 2026 brings a simplified, long-term tax system by revising the new Income Tax Act of 2025.