New Delhi: Good news for salaried employees who are likely to benefit from a higher income tax exemption as the draft Income Tax Rules 2026 propose a major change in House Rent Allowance (HRA) deductions. If approved by Parliament, these changes may apply from April 1, 2026.

According to the draft Income-tax Rules, 2026, the government is proposing to expand the scope of higher HRA tax exemption under the old income-tax regime by extending it to more cities. The proposal aims to align tax relief with increased rental prices in rapidly expanding cities and evolving job trends.

New Income Tax: What is the proposed change?

Currently, salaried employees in Mumbai, Delhi, Kolkata and Chennai can claim an HRA tax exemption of up to 50 percent of their salary while those living in other cities can only claim an exemption of 40 percent. Under the draft rules, cities of Bengaluru, Hyderabad, Pune and Ahmedabad are proposed to be added to the 50 percent category. 

New Income Tax: How will the exemption be determined?

According to the proposal, the method for computing HRA relief will remain the same. The exemption will be determined as the lowest of three figures which is the actual allowance received, the excess of rent paid over 10 percent of pay or a prescribed portion of salary linked to the employee’s city of residence.

New Income Tax: Why HRA matters? 

HRA is a portion of an employee’s salary that an employer contributes to help cover house rent. Under the old tax regime, some part of HRA is not taxed which enables employees to save tax. HRA tax benefit is available only in the old tax regime and not in the new one. Even though the newer framework offers lower slab rates, only those employees who opt for the old system are eligible for the HRA exemption.

New Income Tax: What has govt proposed the changes?

The government has proposed the changes to update HRA norms in response to India’s changing economic landscape. In recent times, cities including Bengaluru, Hyderabad and Pune have drawn in a sizeable salaried population. The proposal also aims to align tax relief with higher rental prices in these rapidly expanding cities. 

The final regulations will be forwarded to Parliament following assessment. If approved, these changes will apply from April 1, 2026.

Pakistan is preparing to repay about $1.3 billion in principal and interest on a maturing Eurobond in April 2026, as negotiations with the International Monetary Fund (IMF) approach under the country’s $7 billion reform programme.

As the IMF review mission prepares to arrive in Pakistan later this month, officials said the delegation will stay in Karachi for a couple of days before moving to Islamabad around March 2, 2026, for key discussions under the $7 billion Extended Fund Facility (EFF).

These talks are expected to focus on fiscal reforms, external financing and progress on structural benchmarks agreed under the program.

Officials indicated that the Ministry of Finance plans to launch Panda bonds shortly after the end of holidays in China in an effort to raise the first tranche of $250 million.

According to sources, there are indications of strong investor interest, with expectations of oversubscription for the bond issuance.

The government, officials said, repaid a $700 million Chinese commercial loan ahead of schedule to demonstrate its repayment capacity, while Chinese banks have reportedly assured refinancing within the ongoing fiscal year.

Pakistan is also engaged in negotiations with international commercial banks to secure an additional $500 million in fresh financing during the current fiscal cycle.

Last Updated:February 18, 2026, 11:30 IST

Yotta Data Services to spend $2 billion to deploy Nvidia’s latest Blackwell chips in India, building one of Asia’s largest AI superclusters

Yotta Infrastructure’s Greater Noida data centre park (Photo Credit: Yotta’s website)

India’s data centre sector is entering a new era of scale. Yotta Data Services said Wednesday, February 18, that it will deploy Nvidia’s most-advanced artificial intelligence chips in a $2-billion project that will establish one of the largest AI computing hubs in Asia, positioning the country as a serious contender in the global race for AI infrastructure.

The investment centres on the first-ever deployment of Nvidia’s Blackwell B300 graphics processing units in India, to be housed at Yotta’s hyperscale campus in Noida, just outside New Delhi. The supercluster is expected to go live by August.

Anchoring the project is a four-year agreement with Nvidia valued at roughly $1 billion, under which the chipmaker will establish one of Asia-Pacific’s largest DGX Cloud clusters within Yotta’s infrastructure. Sunil Gupta, managing director and chief executive of Yotta, told The Economic Times that Nvidia will deploy approximately 10,300 GPUs through the arrangement to serve its global Asia-Pacific customers and run its own models and services. “Nvidia is creating one of Asia’s largest DGX Cloud clusters on our supercluster,” Gupta said.

The deal underscores a broader shift in how hyperscalers and chipmakers are approaching India. Global cloud providers, including Microsoft and Amazon, have been expanding AI data centre capacity in the country, drawn by surging demand for generative AI services and government pressure to localise advanced computing infrastructure, according to Reuters. Nvidia’s direct commitment within Yotta’s facility goes a step further, signalling confidence in India as a viable hub for serving enterprise AI workloads across the region.

A significant share of remaining capacity will be dedicated to India’s national AI Mission, which has received more than 500 applications from start-ups seeking affordable compute access. Gupta told The Economic Times that the expansion will increase the country’s compute capacity “by almost five to six times”, addressing what he described as enormous pressure on existing resources. The infrastructure will support state-backed Indian language model initiatives, including Bhashini, Sarvam, BharatGen and Soket, all aimed at building foundational AI models trained on Indian-language datasets.

Yotta currently holds around 10,000 advanced Nvidia GPUs, accounting for nearly 75% of India’s GPU compute capacity. With the new deployment, its total GPU count will rise from roughly 40,000 to more than 75,000 over the next two years.

The capital push is being funded through a combination of debt and equity. Speaking to CNBC-TV18, Gupta said the company is targeting a fundraise of close to $1 billion to support its current phase of GPU deployment. Yotta has already invested over $1.5 billion in infrastructure and expects to commit an additional $2 billion toward advanced chips. A pre-IPO equity round is underway, with the company aiming to enter public markets within the current financial year.

Yotta is part of Indian billionaire Niranjan Hiranandani’s real estate conglomerate and operates data centre campuses in Mumbai, Gujarat and near New Delhi. Additional capacity from its Mumbai facility will supplement the Noida supercluster.

The timing of the investment is notable. US export controls have reshaped global supply chains for advanced AI semiconductors, pushing technology firms to deepen partnerships in markets that remain accessible. India, which has cultivated strong ties with Washington and positioned itself as a neutral beneficiary of great-power competition in technology, has emerged as one of the cleaner plays for companies looking to expand AI compute outside China.

Speaking to CNBC-TV18, Gupta said that India’s AI ambitions are grounded in practical outcomes, with the goal of delivering impact across agriculture, healthcare, education and climate. He drew a comparison to the Unified Payments Interface, suggesting AI-led transformation could similarly reshape how services are delivered at scale across the country.

For Nvidia, the DGX Cloud anchor at Yotta is the latest in a string of sovereign and commercial AI infrastructure deals across Asia, as the company works to deepen its footprint ahead of any potential tightening of chip export restrictions.

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