The new financial year 2026-27 starts from April 1, 2026. Income Tax Act, 2025 will also come into force from the same day. Under this Act, many rules related to Income Tax, Investment, TDS/TCS and companies will change. These changes will impact everyone from salary earners to investors, business owners and companies.
New tax treatment for share buyback
Till now, income from share buyback was treated as dividend income and taxed as per income tax slab. From April 1, 2026, profits from buybacks will be treated as capital gains, which means the tax calculation will be based on the purchase price and holding period, just like stock trading.
Increase in STT
Securities Transaction Tax (STT) on futures contracts of securities has been increased. Under the new rules, STT on futures trading has been increased from 0.02 per cent to 0.05 per cent. Options traders have also not been spared. The budget proposes to increase STT on options premium from 0.10 percent to 0.15 percent.
Income from dividends and mutual funds
According to the new rules, now no deduction will be available for dividend or interest expense on mutual fund income, even if the investment is made with borrowed money. Earlier, tax deduction was available for this. This new rule will also come into effect from April 1, 2026.
New rules for Sovereign Gold Bond (SGB)
Under the new rules, tax exemption on SGB will now be available only on bonds purchased directly from the government. SGBs purchased from the secondary market will attract capital gains tax on redemption. Investors will have to wait till maturity to get tax-free returns.
Relief from repeated declaration
Now, instead of filling multiple forms for different income sources, investors will be able to submit a single declaration to avoid TDS. This means that they will not have to fill different forms again and again to avoid tax deduction. Mutual funds, dividends and bonds will all be covered under a single declaration. This will simplify the paperwork and ease compliance.
Buying property from NRI becomes easier
Under the new rules coming into effect from April 1, 2026, it will not be necessary to obtain TAN for deducting TDS 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 expenses
TCS on foreign tour packages has been reduced to 2 percent. Under the Liberalized Remittance Scheme (LRS), TCS on education and medical expenses abroad has been reduced from 5 percent to 2 percent. This will reduce the cost of travel, education and medical treatment abroad.
Relief on PF and ESI employer contribution
Employers will continue to get tax deduction on PF and ESI contributions till the ITR filing deadline. This will reduce financial penalties and compliance risks for employers.
Interest on motor accident compensation tax-free
The interest received on compensation awarded by the Motor Accident Claims Tribunal (MACT) will now be completely tax-free, and no TDS will be deducted. This means that accident victims will get full compensation without any tax deduction.
ITR filing deadline extended
Businesses and trusts that do not require audit can now file their ITR by August 31 instead of July 31. The deadline for salaried individuals will remain 31st July only. The deadline for filing revised returns has been extended from December 31 to March 31.
Disability pension for armed forces completely tax-free
All disability pensions received by 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 the final tax of 14 percent. No new MAT credit will be given. However, the existing MAT credit can be used till March 31, 2026.
