📜 Official Source: Refer CBDT notification for Income Tax Rules 2026
👉 View Government Notification (PDF)

👉 If you are a salaried employee, IT professional, freelancer, or working individual, this directly impacts:

• 💰 Your monthly take-home salary
• 📉 Your TDS deduction by company
• 📈 Your tax savings & income tax refund opportunities

✅ This guide is specially created for Bangalore employees & working professionals across India to help you:
✔ Reduce tax from salary
✔ Increase monthly take-home income
✔ Plan ITR filing for maximum refund

📌 This change is important for:

• 👨‍💻 IT Employees in Bangalore
• 🏢 Private company staff & corporate employees
• 💼 Working professionals (salary income)
• 📊 Anyone whose tax is deducted (TDS) from salary

👉 Important Reality: This is NOT a tax increase.
✔ Tax rates remain same
✔ But tax saving opportunities have increased significantly

💡 What this means for you:
If you are not planning your tax properly, your company will deduct higher TDS automatically.

But with proper guidance from expert CA Sreedhara & Team Prakasha & Co., you can:
✔ Reduce tax legally
✔ Increase your monthly take-home
✔ Get higher tax refund during ITR filing

⚠️ Most employees miss this: Not updating your declarations under new law = loss of tax saving benefits

👉 From April 2026, your company will NOT give Form 16 anymore.

⚡ This is where most employees lose money:
If you don’t submit the new Form 124 properly → your company will deduct extra TDS every month.

💡 Smart Employees Do This:
They don’t wait till March. They plan from April itself and reduce TDS every month.

🚨 Reality Check:
If your salary is ₹8L – ₹25L and you don’t plan → you may lose ₹50,000 – ₹2,00,000 in tax unnecessarily.

👨‍💼 How We Help You:
At Prakasha & Co., CA Sreedhara & team will:
✔ Review your salary structure
✔ Guide what to declare in Form 124
✔ Reduce your monthly TDS legally
✔ Maximize your tax refund

👉 This is where you actually save your hard-earned salary
👉 If structured properly → you can reduce ₹50,000 to ₹2,00,000 tax yearly

⚡ Reality: Most companies don’t automatically optimize your salary.
You need proper planning to unlock these benefits.

✔ Bangalore now treated as Metro City
✔ 50% HRA exemption allowed (earlier only 40%)

💡 Higher rent = Higher tax saving

🔼 Now: ₹36,000/year
🔽 Earlier: ₹1,200

👉 Huge increase → now actually useful for tax saving

🔼 Now: ₹1,08,000/year
🔽 Earlier: ₹3,600

👉 Best for employees with children studying outside

🔼 Now: ₹15,000 tax-free
🔽 Earlier: ₹5,000

👉 Festivals / rewards = tax-free benefit

🔼 Now: ₹2,00,000 tax-free
🔽 Earlier: ₹20,000

👉 Useful for personal needs without tax impact

🔼 Now: ₹1,00,800/year
🔽 Earlier: ₹25,200

👉 One of the easiest tax-saving components

✔ Engine above 1.6L:
🔼 Now: ₹7,000/month tax-free
🔽 Earlier: ₹2,400/month

👉 Ideal for IT professionals & senior employees

💡 Pro Tip:
These benefits are NOT automatic. You must structure your salary properly with expert guidance.

🚨 Most employees lose money here:
Companies give default salary structure → you pay unnecessary tax.

👨‍💼 Solution:
With CA Sreedhara & Team Prakasha & Co., you can:
✔ Restructure your salary
✔ Use all above benefits
✔ Reduce monthly TDS
✔ Increase take-home salary

👉 Many Bangalore employees claim HRA by paying rent to parents or family members
👉 Under new tax law, this is now under strict reporting & verification

⚡ New Rule (Very Important):
If your annual rent is above ₹1,00,000 → you MUST disclose full details in Form 124

🚨 Warning:
If you don’t declare properly in Form 124:
❌ Your HRA claim can be rejected
❌ Extra TDS will be deducted
❌ Possible notice from Income Tax Department

✔ Paying rent to parents is 100% legal
✔ But must be properly structured & documented

👉 This is where most employees make mistakes and lose tax benefits

👨‍💼 How Prakasha & Co. Helps You:
CA Sreedhara & team will:
✔ Structure your HRA legally
✔ Guide rent agreement & documentation
✔ Ensure Form 124 is correctly filed
✔ Protect you from notices & tax loss

💡 Reality Check:
Many IT employees in Bangalore lose ₹30,000 – ₹1,00,000 tax benefit yearly due to wrong HRA claims.

👉 Most Bangalore employees pay more tax than required 👉 Not because of high salary… but due to poor tax planning

⚡ Truth: Your company only deducts TDS. They don’t optimize your tax. That’s YOUR responsibility.

✔ HUF (Hindu Undivided Family) formation for tax splitting
✔ Capital gain planning (shares, mutual funds, RSU)
✔ Freelancing / consultancy income structuring
✔ LLP / Company setup for tax optimization

🚨 Common Mistake:
Employees start tax planning in March → Too late → No real savings

📅 Best Time to Plan:
April to June → This is when you can control your entire year’s tax

👨‍💼 Work with Experts – Don’t Guess Your Tax

At Prakasha & Co., CA Sreedhara & team will:
✔ Analyze your salary & tax position
✔ Create personalized tax saving plan
✔ Reduce your monthly TDS
✔ Maximize your ITR refund

💰 Result:
More take-home salary + Less tax stress + Higher savings

👉 If you are earning and paying tax… you NEED planning. 👉 The question is not “whether” — but “when”.

🚨 Warning:
If your tax is deducted heavily every month OR you get very low refund → You are likely overpaying tax.

✔ Reduced monthly TDS (higher take-home salary)
✔ Maximum possible tax refund during ITR filing
✔ Legal tax saving (no risk, no notices)
✔ Better financial planning for future

⚡ Best Time to Act:
April – June → Control your entire year tax
June – July → Maximize refund during ITR filing

👨‍💼 Let Experts Handle Your Tax – You Focus on Your Career

At Prakasha & Co., CA Sreedhara & team provide complete support:
✔ Tax Planning | ✔ Salary Structuring | ✔ ITR Filing | ✔ Refund Optimization

• HUF for Tax Savings
• LLP Registration for Tax Planning
• Private Limited Company Setup
• Income Tax Refund Services

💰 Final Thought:
The difference between paying high tax and saving tax is not income — it is proper planning.

👉 Quick answers to common doubts of employees & professionals to help you save tax and avoid mistakes

💼 1. Why is my company deducting high TDS every month?

Your company deducts tax based on default assumptions. If you have not submitted Form 124 (investment declaration) or structured your salary properly, they will deduct higher tax to stay safe.

💰 2. How can I reduce TDS from my salary legally?

You can reduce TDS by:
✔ Declaring correct investments in Form 124
✔ Using HRA, food, car lease benefits
✔ Structuring salary with expert guidance

👉 Proper planning at the start of the year is key.

📄 3. What is Form 124 and why is it important?

Form 124 replaces Form 12BB. It is used to declare your:
✔ Rent (HRA)
✔ Investments
✔ Deductions

👉 If not submitted → you will lose tax benefits and pay extra TDS.

🏠 4. Can I claim HRA by paying rent to my parents?

Yes, it is 100% legal. But under new law:
✔ You must declare landlord PAN
✔ Mention relationship
✔ Maintain proof of payment

👉 Incorrect claim may lead to rejection or notice.

📊 5. Will I get income tax refund after filing ITR?

Yes, if excess TDS is deducted. 👉 With proper planning, many employees get ₹10,000 to ₹1,00,000+ refund.

📅 6. When should I start tax planning?

Best time: April to June
👉 Planning in March is too late and gives very limited benefit.

📈 7. I have RSU / shares / mutual funds – how to save tax?

You can use:
✔ Capital gain planning
✔ Tax harvesting strategies

👉 Proper planning can significantly reduce tax on investments.

👨‍👩‍👧 8. My spouse and I both earn – how to save more tax?

You can:
✔ Plan deductions smartly between both
✔ Use HUF / property planning
✔ Optimize investments jointly

👉 This can reduce overall family tax significantly.

💼 9. I am a freelancer or professional – can I save more tax?

Yes, freelancers can save more tax using:
✔ Expense deductions
✔ Presumptive taxation
✔ LLP / company structure

👉 Proper structuring can reduce tax significantly.

📞 10. How can I get expert help for my tax planning?

You can consult CA Sreedhara & Team Prakasha & Co. for:
✔ Personalized tax planning
✔ TDS reduction
✔ Maximum refund in ITR

👉 Early consultation = more savings.

💡 Tip: Don’t wait till tax filing season. Start planning early and keep more money in your pocket every month.

👨‍💼 About the Author – Sreedhara S

Sreedhara S is a senior Income Tax Expert in Bangalore working with Prakasha & Co., with over 20+ years of experience in tax planning, salary structuring, and compliance advisory.

He has been actively advising:
✔ IT employees & senior professionals on salary tax optimization
✔ Companies on payroll structuring & TDS planning
✔ HR & payroll vendors like Hewitt, Mafoi, TeamLease

His expertise includes:
✔ Tax restructuring for maximum take-home salary
✔ Implementation of car lease & employee benefit plans
✔ Income tax planning for high-salary individuals
✔ End-to-end support for TDS reduction & ITR refunds

✍️ Last Updated: 01 April 2026

👉 We always recommend verifying tax updates from official government sources. Below are trusted links to help you understand and plan your taxes better.

📜 Government Notification – Income Tax Rules 2026
Check official CBDT notification for new law changes:

👉 View Official Notification (PDF)

🧮 Free Income Tax Calculator (Government Tool)
Calculate your tax instantly under new regime:

👉 Use Free Tax Calculator

👨‍💼 Expert Tax Advisory – Team IN Filings
Explore our services for tax planning & compliance:

👉 Visit Our Official Website

💡 Pro Tip: Always combine government reference with expert advice to maximize your tax savings legally and avoid mistakes.