Salaried employees in India could see a slight increase in their monthly take-home pay starting April 1, 2026.
This comes as the government prepares to implement the Income-tax Act, 2025, which replaces the old Income-tax Act of 1961.
One of the main reasons for higher in-hand salary is the standard deduction, which is currently ₹75,000 for salaried individuals.
This deduction lowers taxable income, giving employees more disposable income each month.
Tax Benefits for Middle-Income Earners
Under the new tax regime, individuals earning up to ₹12 lakh per year may effectively pay zero income tax thanks to the Section 87A rebate.
For salaried employees, combining this rebate with the standard deduction means tax-free income can go up to around ₹12.75 lakh.
Although income-tax slabs remain the same for FY 2026-27, the new law is expected to simplify tax compliance while keeping the tax relief measures introduced in recent budgets.
What This Means for You
The changes aim to make the tax system simpler and more transparent.
Salaried taxpayers will continue to benefit from deductions and rebates, potentially increasing their monthly take-home salary depending on income and the tax regime chosen.