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last mo.

Allahabad High Court Judge Challenges CBDT Denial of Statutory Allowance Exemption Under New Tax Regime

The court has asked the tax board for instructions, a step that will decide whether an administrative memo can curtail benefits granted by a parliamentary law.

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Overview

  • Justice Sandeep Jain filed a petition after the income-tax portal prevented him from claiming ₹9.85 lakh of statutory allowances when he tried to file under the new tax regime for FY 2025–26.
  • A two-judge division bench of the Allahabad High Court heard the case and asked the Central Board of Direct Taxes for instructions, directing the matter to be listed again on July 28, 2026.
  • The petition argues Section 22D of the High Court Judges (Salaries & Conditions of Service) Act, 1954 is a special parliamentary statute that exempts certain judicial allowances and can be changed only by amending the Act.
  • The CBDT’s office memorandum of September 12, 2025 says taxpayers who opt for Section 115BAC(1A) cannot claim such perquisites because the new regime’s lower slabs and rebates would amount to a double benefit.
  • The court’s decision could force the CBDT to revise its guidance or prompt a legislative fix, and it may affect other officials who claim statutory perquisites when opting for the new tax regime.