Core Viewpoint - The Income-tax Act, 2025 will be effective from April 1, 2026, with procedural details outlined in the draft Income-tax Rules, 2026, which are open for stakeholder feedback until February 22, 2026 [1][2]. Taxation Changes for Perks and Allowances - The new IT Rules introduce significant changes in the taxation of perks and allowances for salaried individuals, updating thresholds and valuation methods to reflect current economic conditions [2]. General Threshold for Taxing Perks - The exemption threshold for non-monetary benefits (perks) has increased from ₹50,000 to ₹4 lakh per annum for employees [3]. Overseas Medical Treatment - The exemption threshold for travel costs related to overseas medical treatment has been raised from ₹2 lakh to ₹8 lakh [4]. Use of Company Car - Valuation for perks related to company cars has increased significantly, with new monthly valuations set at ₹5,000 for small cars and ₹7,000 for big cars, along with a driver's salary valued at ₹3,000 [6][7]. Interest-free Loans - The threshold for tax exemption on interest-free loans from employers has increased from ₹20,000 to ₹2 lakh [13]. Gifts, Vouchers, Tokens - The exemption limit for gifts, vouchers, or tokens received from employers has been raised from ₹5,000 to ₹15,000 per annum [14]. Free Food - The threshold for non-taxable free or subsidized meals has increased from ₹50 to ₹200 per meal [15]. Leave Travel Assistance - The new rules simplify the exemption calculation for leave travel assistance, capping it at ₹30 per km for journeys not connected by recognized public transport [19]. House Rent Allowance - The new rules extend HRA exemptions to employees in additional cities, allowing up to 50% of salary for residents of Bengaluru, Pune, Ahmedabad, and Hyderabad [21]. Children's Allowance - The exemption for children's education allowance has increased from ₹100 to ₹3,000 per month per child, and for hostel allowance from ₹300 to ₹9,000 per month per child [22]. Transport Worker Allowance - A new exemption for transport workers has been introduced, capped at a minimum of ₹25,000 per month or 70% of the allowance [23]. Other Exemptions - Various other allowances, including those for armed forces and physically challenged individuals, have seen substantial increases in exemption caps [24]. Regime Considerations - The new perks provisions apply to both old and new tax regimes, but allowances are only exempt for those opting for the old regime, making it essential for taxpayers to evaluate their tax liabilities before making a decision [25].