How do I set up the new Income Tax Act 2025 rules in Zoho Payroll India?

You mostly do not need to. Zoho Payroll India has said it applies the Income Tax Act 2025 and Rules 2026 automatically from 1 April 2026, including renumbered sections, new form names and updated calculations. Your job is to review employee declarations, check perquisites such as company cars and loans, and explain the changes to staff. Check Zoho's announcement for current details.

The new Act replaced the 1961 Act from 1 April 2026. Many sections were renumbered, and familiar forms have new names. Form 16 becomes Form 130 and the employee declaration form becomes Form 124 for FY 2026-27 onward. Zoho Payroll maps these for you, so payslips, TDS calculations and forms use the new references.

Some changes affect amounts. The list of metro cities for HRA under the old regime has been expanded, company car perquisite values have been revised, and the exemption for interest-free employer loans has been raised. Slabs and rates did not change. Review employees who use the old regime, have company cars or have employer loans, because their tax may shift.

Work through a checklist. Confirm the regime each employee chose, ask staff to submit declarations in the new form, verify perquisite settings, and run the first payroll of the year with extra checks. Agree with your CA how to treat FY 2025-26 forms, which stay under the old Act. If anything looks wrong, contact Zoho Payroll support with examples.

Written by Flowpeak, a Zoho implementation partner. Zoho pricing and features change, so confirm current details on the official Zoho site. Free checklists | Ask us a question