Earlier: 

• Lower Basic meant lower Provident Fund deductions, leading to higher monthly cash in hand.

WEF: 01.04.2026: 

1. Higher base component means more Employees Provident Fund is deducted every month.

How will it affect you?: 

• Your monthly take-home might drop slightly, but your retirement savings Provident Fund will grow much faster.

Source:

Form 16 replaced with Form 130 for the financial year 2026-2027

Form 16 (Employer Salary TDS Certificate)

Under the new income tax rules 2026, Form 16 was replaced by new Form 130

Form 130 Read Full Information :

Earlier: 

• Base component was usually 25 - 40% of CTC (Cost to Company)

WEF: 01.04.2026: 

• Uniform wage definition will apply
• Wages = Base + DA + retaining allowance must be at least 50% of CTC
• PF, gratuity, etc. will be calculated on this

How will it affect you ?

• Since DA and retaining allowance are rare in private jobs
• Base salary will increase to 50% of CTC

SOURCE: