Section 10(14) of the Income Tax Act provides tax exemption on Children Education Allowance and Hostel allowance received from an employer. The exemption covers tuition fees paid for a child’s education and is available only when opting for the old tax regime, subject to prescribed limits and conditions. Tuition fees can also be claimed as a deduction under Section 80C. However, these exemptions and dedctions are not allowed under the new tax regime. As per the Income Tax Rules 2026, the eligible limits for children education allowance and hostel allowance has been significantly increased from the previous limits. Key HighlightsTax Regime: Only under the old tax regime.Threshold Limit: Rs. 1,200 per child for maximum two children.

Home loan can be a highly beneficial tax saving tool for taxpayers, and the scale of benefit depends on choice of regime, status of occupancy, and quantum of loan interest due and principal payment for the financial year, etc. Using Section 80C and Section 24(b), a homeowner under the old tax regime can reduce their taxable income by up to Rs. 3.5 lakh every year. Home Loan Tax Benefits - Key HighlightsThe maximum limits for deductions available against interest and principal paid during the financial year are presented in a table below: DeductionComponentMaximum LimitTax RegimeSection 80CPrincipalRs. 1.5 lakhOld Tax RegimeSection 24(b)InterestSelf-occupied property: Rs. 2 lakhOld Tax RegimeLet-out property: Entire interest up to rental incomeOld & New Tax RegimeSection 80EEInterestRs. 50,000Old Tax RegimeSection 80EEAInterestRs.

Gifts received by taxpayers are both taxable and exempt under the Income Tax Act depending on who the person gifting is. Gift received from specified relative is completly exempt from tax. However, gifts receoved from non-relatives is taxable as “Income From Other Source” when the aggregate value of the gifts received in the year exceeds Rs. 50,000. Gifts received on the occassion of marriage is completely exempt irrespective of the value and the person gifting. What is a Gift as per the Income Tax Act?As per Section 56 of the Income-tax Act, 1961 gifts received by any person or persons are taxed in the hands of the recipient under the head ‘Income from other sources’ at applicable slab rates.

Resident individuals holding foreign assets or financial interests in the U.S. or any other country must disclose them in their Income Tax Return (ITR) in India. Filing an ITR is mandatory for such taxpayers even if their income is below the basic exemption limit.Foreign assets must be reported in Schedule FA of the ITR if the taxpayer is a legal owner, beneficial owner, or beneficiary. A beneficial owner is a person who paid for the asset, while a beneficiary is someone who benefits from the asset without paying for it. These details must be reported in ITR-2 or ITR-3, depending on the taxpayer’s income sources.Taxpayers must disclose details of:Foreign bank or custodial accountsInvestments in foreign equity or debtForeign insurance or annuity contractsFinancial interest in foreign entitiesImmovable property outside IndiaOther foreign capital assetsAccounts where they have signing authorityTrusts where they are trustee, beneficiary, or settlorTax Implications on stock trading in the US1.

Belated returns can be filed under section 139(4) until 31st December of the next tax year by taxpayers who missed their original due date. Late fees under Section 234F and interest under Section 234A are applicable when returns are filed in delay. Taxpayers who missed the deadline to file a belated return have to file an Updated Return with additional penalties. Key HighlightsPenalty: Late fee of Rs. 1,000 or 5,000 (u/s 234F) and interest u/s 234A.Limitations: Business and capital losses cannot be carried forward; certain deductions are disallowed.Last Date: The last date to file a belated return for FY 2025-26 (AY 2026-27) is 31st December 2026.What is a Belated Return?If you have missed filing your return with the original return due date, you can still file belated return under section 139(4).The due date for filing original returns for the FY 2025-26 is 31st July, 2026.The due date for filing belated return 31st December of the next tax year. For financial year 2025-26, the due date for filing belated return is 31st December, 2026.It is recommended to file belated return even if you have missed your original return due date, to avoid consequences of not filing ITR.Note: The due date for belated return still remains the same, while Budget 2026 has amended the due date for revised return with a penalty.Who can file Belated Returns?Belated return can be filed by any taxpayer who has missed the due date for original ITR.This option is available for all kinds of assessees, and for all types of ITR forms.Taxpayers who have missed the due date of 31st December for belated returns, cannot file belated returns.How to File Belated Returns?If you wish to file it on Income Tax Portal, take a look at this step-by-step guide on how to file a belated return online and offline.1.

Section 80C is one of the most popular tax saving deductions, allowing both individuals and HUFs to claim up to Rs. 1.5 lakh deduction per financial year. It covers a variety of investments and payments such as PPF, ELSS, life insurance premiums, NSC, EPF, Sukanya Samriddhi Yojana and, home loan principal repayment, and tuition fees. Key Highlights Section 80C deduction is available only under the old tax regime.Additional Rs. 50,000 deduction can be claimed u/s 80CCD(1B) on contribution to specified pension funds.Parallel provisions in the Income Tax Act, 2025 are dealt under section 123 of the act.What is Section 80C Deductions?Section 80C is a deduction against total income, allowing you to reduce the taxable income up to a Rs. 1.5 lakhs.

Yes, the tax regime can be changed while filing ITR. For salaried individuals, switching between the old and new tax regimes is allowed every assessment year while filing returns. However, for individuals with business or professional income, switching is allowed only once in a lifetime. To switch back to the old tax regime, they must file Form 10-IEA as per the Income Tax Rules.How Can I Change My Tax Regime While Filing ITR?Changing your tax regime is simple with a single click. ITR 1 & ITR 2 forms ask the taxpayer “Do you wish to exercise the option u/s 115BAC(6) of opting out of the new tax regime (default is ‘No’)?”.

ESOP (Employee stock option plan) offers employees equity shares of the company, on satisfaction of vesting conditions. They are treated as a part of salary for the purposes of taxation.Though the Income Tax Act 2025 takes effect from 01st April 2026, the provisions of the 1961 Act applies for Ay 2026-27, as it pertains to income earned up tp 31st March, 2026. Terms on ESOPs Before you understand the taxation of ESOPs and RSUs, here are some key terms you must know:ESOP – Employee Stock Option Plan, allows an employee to own equity shares of the employer company over a certain period. The terms are agreed upon between the employer and employee.ESPP - Employee Stock Purchase Plan allows an employee to own equity shares of the employer based on the agreed purchase price. Employees pay for such stock at a discounted price which is paid directly from their bank account or deducted on a monthly basis from the payroll or payslip.RSU - Restricted Stock Units are usually issued by those companies listed outside India. In the case of RSU, it is issued to employees as a reward when the employee achieves a milestone or target.

ITR-2 is an Income Tax Return form for individuals and HUF who do not have income from business or profession. It is applicable to taxpayers earning income from capital gains, more than one house property, foreign assets or foreign income, and for NRIs.In simple terms, taxpayers who are not eligible for ITR-1 and do not have business or professional income should file ITR-2.ITR-2 Filing for FY 2025-26 (AY 2026-27)The Income Tax Department has enabled the online and excel utility based filing of ITR-2 form for FY 2025-26. Taxpayers can now file ITR-2 through the Income Tax e-filing Portal.  Who Can File ITR-2?ITR-2 form is for individuals and HUF receiving income other than income from ‘Profits and Gains from Business or Profession’.Income from salary or pensionIncome from house property (income can be from more than one house property)Income from capital gains or loss on sale of investments or property (both short-term and long-term)Income from other sources (including winning from lottery, bets on racehorses and other legal means of gambling)Agricultural income of more than Rs 5,000Resident not ordinarily resident and a non-residentThe total income from the above sources may exceed Rs 50 lakh.Further, if you are a Director of any company and an individual who has invested in unlisted equity shares of a company, you must file returns in ITR-2.Who Cannot file ITR-2?Any individual or HUF having income from business or profession.Note - Taxpayers eligible to file ITR-1 can also file ITR-2. However, it is advisable to file using ITR-1 as long as they meet the eligibility criteria.Last Date to File ITR 2 for FY 2025-26 (AY 2026-27)The due date to file ITR-2 for FY 2025-26 (AY 2026-27) is 31st July 2026.

Salary includes a bundle of various allowances and benefits, which have different taxation exemption rules. By smartly claiming Income tax deductions and exemptions available to salaried employees, you can significantly lower your tax liability. Sections like HRA, standard deduction, leave travel allowances, and more, provide an excellent and wide range of benefits that can help you to optimise your salary structure and maximise tax savings.In this article, we have listed some of the most important income tax deductions and tax-free allowances available to salaried persons, using which one can reduce their income tax liability.Exemption of Allowances1. House Rent AllowanceA salaried individual having a rented accommodation can get the benefit of HRA (House Rent Allowance). This could be totally or partially exempted from income tax.  However, it will be taxable if you don’t live in any rented accommodation and continue receiving HRA.