Statutory and legislative payroll changes in India, each linked to the page it was checked against. For information only, not legal or tax advice: confirm details with the source before acting. See the terms.
New tax regime slabs revised; full rebate up to INR 12 lakh
FY 2025-26
Under the alternate (new) personal tax regime, income up to INR 400,000 is taxed at 0%, rising through 5%, 10%, 15%, 20% and 25% bands to 30% above INR 2,400,000, and residents with total income not exceeding INR 1,200,000 receive a rebate of the lower of the tax or INR 60,000.
For the employer
- Compute TDS on salary for employees in the new regime using the revised slabs and the INR 60,000 rebate.
For the employee
- Resident employees in the new regime with total income up to INR 12 lakh pay no income tax.
Source: PwC Worldwide Tax Summaries - India, Individual - Taxes on personal income · Last verified 1 October 2026
Four Labour Codes in force from 21 November 2025
Effective 21 Nov 2025
The Code on Wages 2019, the Industrial Relations Code 2020, the Code on Social Security 2020 and the Occupational Safety, Health and Working Conditions Code 2020 took effect on 21 November 2025. They introduce a standardised definition of wages and extend gratuity to fixed-term employees after one year of service (against five years for full-time employees).
For the employer
- Review salary structures and contracts against the new uniform definition of wages.
- Provide gratuity to fixed-term employees who complete one year of service.
- Watch for final central and state rules, which were yet to be notified.
For the employee
- Fixed-term employees become eligible for gratuity after one year of service.
The Employees' Provident Funds and Miscellaneous Provisions Act, 1952 had not yet been repealed per the cited source; final central and state rules were still to be notified at the time of that article (December 2025).
Source: KPMG India - Implementation of labour codes: What changes and road ahead · Last verified 1 October 2026
Income-tax Act, 2025 replaces the 1961 Act from 1 April 2026
Effective 1 Apr 2026
The Income-tax Act, 2025 applies to tax years starting from 1 April 2026 and completely replaces the old law. For individuals with business income whose accounts do not require audit, the return due date is 31 August of the year immediately following the relevant year, and revised returns may be filed by 31 March.
For the employer
- Update payroll and tax-filing calendars and references for tax years starting 1 April 2026.
For the employee
- Individuals with business income and no audit requirement file returns by 31 August following the relevant year.
Summary is from PwC Worldwide Tax Summaries; the government site was not used.
Source: PwC Worldwide Tax Summaries - India, Individual - Significant developments · Last verified 1 October 2026