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News Topical, Digital Desk : The new financial year 2026-27 begins on April 1, 2026. The Income Tax Act, 2025, will also come into effect on that day. Under this scheme, many rules related to income tax, investments, TDS/TCS, and companies will change. These changes will affect everyone from salaried individuals to investors, business owners, and companies.
New tax method on share buyback
Until now, earnings from share buybacks were considered dividend income and taxed according to the income tax slab. From April 1, 2026, gains from buybacks will be treated as capital gains, meaning that, just like stock trading, tax will be calculated based on the purchase price and holding period.
Increase in STT
The Securities Transaction Tax (STT) on securities futures trades has been increased. Under the new rules, the futures trading STT has been increased from 0.02% to 0.05%. There is no exemption for options traders. In the budget, the government proposed increasing the options premium STT from 0.10% to 0.15%.
Income from dividends and mutual funds
Under the new rules, there will no longer be a deduction for dividends or interest expenses on mutual fund income, even if the investment was made with borrowed funds. Previously, these were tax deductions. This new rule will also take effect on April 1, 2026.
New rules for Sovereign Gold Bonds (SGB)
Under the new rules, tax exemption on SGBs is now available only on bonds purchased directly from the government. SGBs purchased from the secondary market will be subject to capital gains tax upon redemption. Investors will have to wait until maturity to benefit from tax-free returns.
Relief from repeated declaration
Investors will now be able to submit a single declaration to avoid TDS, rather than filing multiple forms for different income sources. This means they won't have to repeatedly fill out separate forms to avoid tax deductions. Mutual funds, dividends, and bonds will all be covered in a single declaration. This will simplify paperwork and ease compliance.
Buying property from NRIs has become easier
Under the new rule, effective April 1, 2026, TAN will no longer be required for TDS deduction when purchasing property from a non-resident Indian (NRI). Buyers will now be able to deduct TDS using only their PAN. Overall, cross-border property transactions will become easier.
Reduction in TCS on foreign expenditure
The TCS on foreign tour packages has been reduced to 2%. The TCS on foreign education and medical expenses under the Liberalized Remittance Scheme (LRS) has been reduced from 5% to 2%. This will reduce the cost of travel, education, and medical treatment abroad.
Relief on PF and ESI employer contribution
Employers will now continue to receive tax deductions on PF and ESI contributions until the ITR filing deadline. This will reduce financial penalties and compliance risk for employers.
Interest earned on motor accident compensation is tax-free
The interest earned on compensation awarded by the Motor Accident Claims Tribunal (MACT) will now be completely tax-free and TDS will not be deducted. This means that accident victims will receive full compensation without any tax deductions.
ITR filing deadline extended
Unaudited businesses and trusts will now be able to file their ITR until August 31st, instead of July 31st. For salaried individuals, the deadline remains July 31st. The deadline for filing revised returns has been extended to March 31st, instead of December 31st.
Disability pension for armed forces completely tax-free
All disability pensions given to armed forces personnel injured while serving the country will now be completely tax free.
MAT becomes the final corporate tax
The minimum alternate tax (MAT) for companies will now be 14% of the final tax. No new MAT credit will be granted. However, existing MAT credit can be used until March 31, 2026.
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