From new income-tax rules to GST rate revisions — here’s what changed for taxpayers as Modi becomes longest-serving PM

Narendra Modi on 10 June, achieved a historic milestone by becoming India’s longest-serving elected prime minister in continuous office. He has completed 4,399 consecutive days in power, surpassing the 4,398-day record held by former Prime Minister Jawaharlal Nehru.

To mark the occasion, Modi is set to chair a conclave of chief ministers, deputy chief ministers and senior leadership from NDA-ruled states and Union Territories (UTs) at Bharat Mandapam in New Delhi.

Notably, this also marks 12 years since the formation of the National Democratic Alliance (NDA) government. We look at some of the changes the Modi-led NDA has launched for taxpayers over the past 12 years.

What has changed for taxpayers

Under Modi, India’s taxation laws and the tax system have been reworked to adopt a digital-first, simplified approach. Key changes include revisions to Goods and Services Tax (GST) rates, updates to the income-tax law and rules and new regulations for income-tax return (ITRs).

New income-tax rules

Earlier this year, the Finance Ministry notified the new Income-Tax Rules, 2026. The updates reduced the number of tax rules from 399 to 190, while tax forms were cut from 511 to 333. All forms now share the same design and feature clearer text, along with features such as auto-filled data.

The changes aim to make the taxation system easier for businesses and taxpayers to use.

New tax regime

Finance Minister Nirmala Sitharaman, in her Union Budget speeches over the years, announced the new tax regime, introducing different tax slabs and exemption rules to offer a higher ceiling on taxable income for salaried individuals by up to ₹12 lakh annually. The new tax regime slabs are as follows:

• Zero tax for income up to ₹2.5 lakh
• 5% for income between ₹2.5 lakh and up to ₹5 lakh
• 10% for income between ₹5 lakh and up to ₹7.5 lakh
• 15% for income between ₹7.5 lakh and up to ₹10 lakh
• 20% for income between ₹10 lakh up to ₹12.5 lakh
• 25% for income between ₹12.5 lakh and up to ₹15 lakh
• 30% for income above ₹15 lakh.

GST rationalisation

Sitharaman last year announced a revision of the  GST rates in India to simplify business compliance and reduce cascading tax burdens.

The GST Council revised slabs from four (5%, 12%, 18% and 28%) to two (5% and 18%), plus a special rate of 40% on select items and sin goods. As a result, as many as 375 items, including automobiles, electronics, equipment, kitchen staples and medicines, got cheaper.

Corporate perks

• Meal cards: No taxes for corporate meal cards that cost ₹200 or less per meal, under the Old Tax regime only. This includes free food and non-alcoholic beverages for employees, and is an increase from the previous ₹50 per meal.
• Coupons and gift cards: Corporate gift cards, gift certificates or coupons of up to ₹15,000 each year are tax-free under the Old Tax regime.
• Corporate loans: Loans with no interest or interest rates below the market rate are to be taxed, based on the difference between the State Bank of India (SBI) lending rate and the actual rate charged, subject to certain exceptions. However, loans less than ₹2 lakh and those taken for medical emergencies remain tax-free.
• Corporate/company vehicle: For vehicles assigned by the employer for work and personal use, a tax of ₹8,000/month applies to cars with engines up to 1.6 litres, and ₹10,000/month for bigger vehicles. This amount is under both the Old and New Tax regimes.

HRA exemption and other allowances

HRA: Four new cities added to the list of metros allowed to claim 50% House and Rental Allowance (HRA) exemption. Ahmedabad, Bengaluru, Hyderabad and Pune have been added to the list, which includes Chennai, Delhi, Kolkata and Mumbai. This is under the Old Tax regime.

Children’s education-related expenses: The exemption for the children’s education allowance has increased from ₹100/month to ₹3,000/month, per child under the Old Tax regime. Further, the hostel expenditure allowance under the old tax regime has also been increased from ₹300/month to ₹9,000/month, per child.

Sector allowance: The exemption for the allowance granted to employees working in any transport system has been enhanced from ₹10,000/month or 70% of the allowance, whichever is lower, to ₹25,000/month or 70% of the allowance, whichever is lower.

Securities Transaction Tax hike

The Centre has hiked the Securities Transaction Tax (STT) on the equity derivatives segment, a move expected to hit futures and options (F&O) traders. STT on futures will increase to 0.05% from 0.02%, and on options transactions will be raised to 0.15% from 0.1%, from 1 April. This tax is levied on every purchase and sale of securities, such as equity shares, futures and options on recognised stock exchanges.

Buyback taxation

Any amount received from the buyback of shares will be taxed as capital gains from 1 April. Further, promoter shareholders will have to pay a “differential buyback tax” with an effective rate of 22% for corporate promoters and 30% for non-corporate promoters.

Changes to TCS

The Budget rationalised Tax Collected at Source (TCS) to ease compliance, reduce refund delays, and address confusion among taxpayers, with effect from April. TCS rates on alcoholic drinks is increased from 1% to 2%; TCS rates on remittance under Liberalised Remittance Scheme (LRS) for overseas tour package have been reduced to a single flat rate of 2% without threshold from the existing dual rate of 5% and 20%; TCS rate for remittance under LRS for education and medical treatment has been reduced from 5% to 2%.

Source from: https://www.livemint.com/money/personal-finance/pm-modi-india-longest-continuously-serving-elected-prime-minister-what-changed-taxpayers-income-tax-12-years-nda-govt-11781065655141.html