CA Inter Income Tax Amendments for May 2026 by CA Jasmeet Singh Sir
CA Inter Income Tax Amendments for May 2026 cover revised new tax regime slabs with ₹4 lakh intervals, Section 87A rebate up to ₹12 lakh, marginal relief rules, higher specified employee limit, NPS deduction for minor child, updated TDS/TCS thresholds, new 54EC bonds, and extended updated return time limit to 48 months.
Income Tax Amendments: Income Tax is a core subject in the CA Inter syllabus. It requires regular updates due to frequent amendments. For the May 2026 attempt, several important changes have been introduced through the Finance Act 2025. While the Income Tax Act, 1961 continues to apply, many provisions have been modified.
CA Jasmeet Singh Sir explained the CA Inter Income Tax Amendments for May 2026 in a structured and exam-focused manner. It is helpful for students appearing for the May 2026 exams. It is also useful for those revising after earlier attempts.
Applicability of Amendments for May 2026 Exams
For the May 2026 CA Inter exams, the Income Tax Act, 1961 continues to apply. However, amendments introduced by the Finance Act, 2025, are applicable.
Students must revise the existing provisions. At the same time, they must update their preparation with the latest changes. Ignoring amendments can lead to loss of marks, even if the concept is understood.
Changes in Income Tax Slabs under New Tax Regime
One of the major amendments relates to the new tax regime under Section 115BSC.
The basic exemption limit under the new regime has been increased. It is now higher than before. This change affects salaried individuals and other taxpayers opting for the new regime.
The income slabs under the new regime are now divided into uniform income ranges. Each slab covers a fixed income range. This structure makes tax calculation easier.
The tax rates gradually increase with income. The slabs continue up to a higher income level. Beyond this limit, the highest tax rate applies. This change simplifies the slab system. Students should practice slab-based questions carefully. Questions based on tax computation are commonly asked in CA Inter exams.
Revised Slab Rates for the New Tax Regime (Section 115BAC)
The slab rates for individuals and HUFs opting for the new tax regime have been revised. The new structure uses ₹4 lakh income slabs.
| Revised Slab Rates for the New Tax Regime | |
| Total Income Slab | Tax Rate |
| Up to ₹4,00,000 | Nil |
| From ₹4,00,001 to ₹8,00,000 | 5% |
| From ₹8,00,001 to ₹12,00,000 | 10% |
| From ₹12,00,001 to ₹16,00,000 | 15% |
| From ₹16,00,001 to ₹20,00,000 | 20% |
| From ₹20,00,001 to ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
To easily remember the new slab rates: (The basic exemption limit is ₹4 lakh. Each subsequent slab increases by ₹4 lakh. The tax rate increases by 5% for each slab, up to a maximum of 30%).
Tax Rebate under Section 87A
The rebate rules have changed to help middle-class taxpayers.
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New Regime: If your total income is up to ₹12,00,000, you pay zero tax. This rebate applies only to normal income.
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Old Regime: The limit for rebate remains at ₹5,00,000.
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Marginal Relief: If your income is slightly above ₹12 lakh in the new regime, you get marginal relief.
Changes for "Specified Employees"
Earlier, an employee was "specified" if their monetary salary exceeded ₹50,000. This limit is now ₹4,00,000. This change affects how perquisites like company cars or education facilities are taxed.
Medical and Travel Benefits
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Medical Treatment: Treatment in employer-owned or government hospitals remains exempt.
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Travel Abroad: If an employer pays for foreign medical travel, it is exempt. However, the employee's Gross Total Income must not exceed ₹8,00,000 (previously ₹2,00,000).
National Pension System (NPS) - Section 80CCD
You can now claim a deduction for contributing to your minor child's NPS account.
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The guardian must manage the account.
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The extra deduction limit under Section 80CCD(1B) is still ₹50,000.
New TDS and TCS Thresholds
Many limit thresholds have increased. This reduces the burden of deducting tax on small amounts.
| Section | Nature of Payment | Old Limit (₹) | New Limit (₹) |
| 193 | Interest on Securities | 5,000 | 10,000 |
| 194 | Dividend Income | 5,000 | 10,000 |
| 194A | Other Interest (General) | 40,000 | 1,00,000 |
| 194I | Rent (Monthly) | 50,000 (Annual > 2.4L) | 50,000 (Monthly) |
TCS on Luxury Goods: A 1% TCS now applies to luxury items like expensive watches, bags, and antiques if the value exceeds ₹1,00,000.
Capital Gains (Section 54EC)
You can save tax on capital gains by investing in specific bonds. Two new bonds are added:
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HUDCO (Housing and Urban Development Corporation)
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IREDA (Indian Renewable Energy Development Agency)
Updated Income Tax Return (Section 139(8A))
The time limit to file an "Updated Return" has increased. You can now file it within 48 months from the end of the relevant Assessment Year. Earlier, the limit was 24 months.
Important Note on Aadhaar-PAN Linking
Make sure your PAN is linked with Aadhaar. If not linked by 31 December 2025, your PAN will become inactive.
How to Prepare for Exams?
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Focus on the new slab rates for tax calculation.
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Learn the new TDS/TCS limits as they are high-scoring topics.
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Practice the marginal relief calculation for income near ₹12 lakh.