New Delhi, Feb. 12 -- As part of the Income Tax Rules, 2026, notified last week, the government has proposed three key changes that may tilt the needle towards the old tax regime again.

First, the children's education allowance exemption is to be increased sharply from a token Rs.100 per month per child to Rs.3,000 per month per child. Second, the hostel expenditure allowance exemption is to be enhanced from Rs.300 per month per child to Rs.9,000 per month per child.

Third, Bengaluru, Pune, Hyderabad and Ahmedabad could be classified as metro cities for house rent allowance (HRA) purposes, making residents eligible for a 50% HRA exemption and bringing the exemption limit for residents of these cities on par with Delhi, Mumbai, Kolkata a...