For a large section of taxpayers, the belief around the new tax regime is fairly settled – choose it, and you only get the standard deduction and nothing more.
But a closer look at the Draft Income-tax Rules, 2026, which are expected to be notified before the April 1 rollout, tells a slightly different story. The rules suggest that the government has quietly ensured that several practical tax benefits continue even for those opting for the new tax regime.
The perception that the new tax regime offers little beyond standard deduction stems from the removal of popular deductions such as Section 80C, 80D, HRA and LTA. With the government pitching the new regime as a system with lower tax rates and fewer deductions, many taxpayers concluded that choosing it meant giving up almost all tax benefits.
That assumption, however, does not fully hold.
What new-regime taxpayers still get
The draft income-tax rules make it clear that several salary-linked exemptions and non-taxable perquisites continue to be available even if a taxpayer opts for the new tax regime. These include:
Employer gifts up to Rs 15,000 a year
- Festival gifts, vouchers or small rewards from employers remain tax-free up to Rs 15,000 annually.
Free meals, tea and snacks at the workplace
- Food provided during working hours, including tea and snacks, remains exempt within prescribed limits.
Medical treatment for serious diseases
- Employer-paid medical treatment for specified serious illnesses in approved hospitals is not treated as taxable income.
Interest-free or concessional employer loans up to Rs 2 lakh
- Loans up to Rs 2 lakh provided by employers continue to be exempt from tax.
Laptops and computers for official work
- Work-related laptops and computers provided by employers do not add to an employee’s taxable salary.
Since these are exemptions and perquisite rules, and not deductions under Chapter VI-A, they continue even under the new tax regime.
How this compares with the old tax regime
The old tax regime still remains attractive for taxpayers who actively use deductions and exemptions linked to savings and expenses.
Key benefits under the old regime include:
-Deductions under Section 80C for PF, ELSS and insurance
-Section 80D for health insurance
-HRA and LTA exemptions
-Deductions on home loan interest and education loans
For taxpayers with structured investments and higher claims, the old regime can still result in lower tax outgo despite higher slab rates.
Why the government kept both regimes
Even as the new tax regime is being positioned as the default option, the government has chosen not to scrap the old regime.
Tax experts say this reflects the reality that taxpayers have very different income patterns and financial commitments. Scrapping one regime entirely would have disadvantaged either savers or those seeking simplicity.
By retaining both options—and preserving key exemptions in the new regime—the government appears to be balancing ease of compliance with taxpayer choice.
What taxpayers should keep in mind
With the new income tax law and rules set to take effect from April 1, taxpayers should avoid assumptions and instead review their salary structure, check which benefits they actually receive, and compare tax outgo under both regimes.
Summing up…
The new tax regime is no longer just about standard deduction. It quietly retains several everyday tax benefits that many salaried taxpayers already enjoy. At the same time, the old tax regime continues to reward disciplined savers. As the new tax framework takes shape, the smarter approach for taxpayers may be simple – don’t go by perception—run the numbers before choosing.