Salaried employees in India may see a modest rise in their take-home salary from April 1, 2026, as the new Income-tax Act, 2025 comes into force, replacing the long-standing Income-tax Act, 1961.
A key factor behind the expected increase is the standard deduction available under the new tax regime, currently set at ₹75,000 for salaried individuals. This deduction lowers taxable income and can lead to higher disposable earnings.Under the revised system, taxpayers with annual income up to ₹12 lakh can effectively pay zero income tax due to the Section 87A rebate. For salaried individuals, the addition of the standard deduction means income up to approximately ₹12.75 lakh may remain tax-free.
Although the income-tax slabs for FY 2026–27 remain unchanged, the implementation of the new law is expected to streamline compliance while continuing the tax relief measures introduced in recent budgets.
Overall, the new tax framework aims to simplify the taxation process while helping salaried taxpayers benefit from deductions and rebates, potentially leading to a slight increase in monthly take-home pay depending on income level and the tax regime selected.