New Tax Rules 2026: Gifts Tax-Free Upto Rs 15,000 in Both New and Old Tax Regime, AdvantageClub.ai Ready with Tax Saving Benefits & Rewards

Two key employee benefit changes HR teams will care about

1. Gifts and festival vouchers (new and old tax regime)
 The annual exemption limit for gifts/festival vouchers has been increased from Rs 5,000 to Rs 15,000 in both new and old tax regime. This is especially relevant for engagement and Rewards & Recognition moments—including spot awards, festive gifting, and milestone recognitions—where organizations want employees to feel the value directly.

2. Meal and food vouchers (old tax regime)
The exemption limit for meal/food vouchers has been increased from Rs 50 per meal to Rs 200 per meal under the old tax regime, subject to the conditions specified in the notified rules.

Practical “tax-free” salary can reach Rs 12.9 lakh in new tax regime

Under the new tax regime, many salaried employees can have nil tax liability up to Rs 12 lakh of taxable income, and the Rs 75,000 standard deduction can take this to Rs 12.75 lakh of salary income in practical terms. The revised Rs 15,000 gift/festival voucher exemption can further add tax-efficient value through employer-provided Rewards & Recognition, depending on applicability and structure.

AdvantageClub.ai said its Tax Saving Benefits & Rewards offering has been updated to align with the notified rules, effective April 1, enabling HR teams to structure and issue benefits such as gifts/festival vouchers, and meal vouchers (where applicable) in a compliant manner, so employees experience the enhanced value seamlessly.

“April 1 should feel like a smooth switch, not a scramble. The revised limit on gifts and festival vouchers is a meaningful upgrade for Rewards & Recognition, and the change to meal vouchers further strengthens everyday benefits for eligible employees. We are ready with Tax Saving Benefits & Rewards so HR teams can implement the updated limits with compliance and clarity from Day 1,” said Sourabh Deorah, CEO & Co-founder, AdvantageClub.ai.

Other notified changes impacting salaried employees (selected highlights):

• Company car perquisite (motor car): monthly valuation revised upward—up to 1.6L from Rs 1,800 + Rs 900 to Rs 5,000 + Rs 3,000; above 1.6L from Rs 2,400 + Rs 900 to Rs 7,000 + Rs 3,000 (as applicable by use-case).

• Driver provided by employer: perquisite value revised from Rs 900 per month to Rs 3,000 per month.

• Interest-free or concessional loans: no perquisite value where the aggregate loan does not exceed Rs 2,00,000; medical treatment loans have specific provisions, including limits where reimbursed under medical insurance.

• Children-related allowances (old tax regime): Children Education Allowance revised from Rs 100/month/child to Rs 3,000/month/child; Hostel Expenditure Allowance from Rs 300/month/child to Rs 9,000/month/child.

• HRA expansion + disclosures (old tax regime): “metro” list expanded to 8 cities for 50% of salary (Mumbai, Delhi, Kolkata, Chennai, Bengaluru, Hyderabad, Pune, Ahmedabad); additional disclosure requirements apply in certain cases, including landlord-relationship disclosure in Form 124 where applicable.

• Transport allowance (transport system employees): exemption remains lower of 70% of allowance or the monthly cap, with the cap increased from Rs 10,000 to Rs 25,000 (subject to conditions, including not receiving daily allowance).

• Driver provided by employer (with company car): taxable perquisite value for a driver has been revised from Rs 900 per month to Rs 3,000 per month (effective April 1).

AdvantageClub.ai added that as HR teams recalibrate benefits for the new financial year, organizations should proactively educate employees on what has changed, and help them make an informed choice between the old and new tax regimes based on their individual salary structure and eligible benefits.