Will the old tax regime be discontinued soon?

No, the draft Income-tax Rules for 2026 indicate that the old tax regime is not being phased out and will continue to coexist with the new one.

What are some key benefits retained in the draft tax rules?

The draft rules retain benefits such as employer gifts up to Rs 15,000, workplace meals, and employer loans up to Rs 2 lakh, among others.

How many taxpayers use the new tax regime?

As per the draft rules, approximately 88% of taxpayers have transitioned to the new tax regime.

Home / Business and Economy / Old Tax Regime Lives On: Draft Rules Confirm Continuity

Old Tax Regime Lives On: Draft Rules Confirm Continuity

10 Feb

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Summary

Draft income tax rules of 2026 show old tax regime benefits remain intact.
Nearly 88% of taxpayers have moved to the new tax regime.
Salary exemptions, perquisites, and benefits are regime-neutral.

Old Tax Regime Lives On: Draft Rules Confirm Continuity

Draft Income-tax Rules for 2026, currently open for public comment, reveal that the old tax regime will continue to coexist with the new one. These rules, set to take effect on April 1, 2026, do not distinguish between old and new tax regimes for salary-related exemptions, perquisites, and benefits. This policy ensures that many attractive benefits traditionally associated with the old regime remain accessible to taxpayers.

Key benefits like employer gifts up to Rs 15,000 annually, workplace meals, and employer loans up to Rs 2 lakh are preserved. Detailed provisions for tax-free medical treatment also signal the government's intent to regulate rather than remove these benefits. Experts note that retaining these aspects makes the old regime more practical and inflation-adjusted for salaried individuals.