Income Tax Updates 2026: New Rules for HRA, Property Deals & Home Loan Benefits

Several important changes in income tax regulations, effective from 2026, are set to impact tenants, homebuyers, and property transactions. The updated rules introduce stricter disclosure requirements and revised compliance norms aimed at improving transparency in the real estate sector.

Under the new provisions, individuals claiming House Rent Allowance (HRA) must now specify their relationship with the landlord. Additionally, tenants residing in cities such as Bengaluru, Hyderabad, Pune, and Ahmedabad will be eligible for a higher HRA exemption limit of up to 50%, offering increased tax relief.

In property transactions, quoting PAN has become mandatory for both buyers and sellers where the value exceeds ₹20 lakh. This requirement also extends to transactions involving property gifts and joint development agreements, thereby widening the compliance framework.

For Non-Resident Indian (NRI) transactions, the process has been simplified. Buyers can now deposit TDS using their own PAN, removing the earlier requirement of obtaining a Tax Deduction Account Number (TAN), which will make the process more convenient for individual buyers.

Another key change relates to home loan benefits. Starting April 1, 2026, the interest paid during the pre-construction phase for self-occupied properties will be included within the existing ₹2 lakh annual deduction limit on housing loan interest.

Experts believe these measures indicate a stable and consistent policy approach. Rather than introducing major structural changes, the government appears focused on maintaining continuity in real estate taxation, which is expected to boost confidence among both investors and homebuyers.