Explore the significant financial changes effective from April 2026, including the new Income Tax Act, revised SGB taxation, updated STT rates, and more. Stay informed to optimize your tax and investment strategies.
New Income Tax Act, 2025
SGB Taxation Changes
STT Rate Changes
RBI Digital Payment Rules
Revised ITR Filing Due Dates
Reduction in TCS on Foreign Expenses
Streamlined Form 15G and 15H
FASTag Annual Pass Fee
FAQs on Financial Changes 2026
The Income Tax Act, 2025 introduces a revamped tax structure effective from April 1, 2026.
Revised Tax Structure
The new act restructures tax slabs and rates for individuals.
Introduction of a new tax regime with simplified slabs.
Old regime continues with deductions like ₹1.5 lakh under Section 80C.
New regime offers lower rates but without deductions.
Simplified Language
Provisions are rewritten for better understanding.
Legal jargon reduced for clarity.
Definitions of income sources updated.
Clearer guidelines on tax compliance.
Updated Income Classifications
Income categories are redefined for accuracy.
New classifications for digital income.
Revised definitions for capital gains.
Specific provisions for gig economy workers.
Worked Example
Calculate tax savings under the new regime.
Old regime: Income ₹10 lakh, deductions ₹2 lakh, tax ₹85,800.
New regime: Income ₹10 lakh, no deductions, tax ₹75,000.
Savings of ₹10,800 by opting for the new regime.
Changes to Sovereign Gold Bond (SGB) taxation from April 2026.
Tax Exemption for Original Subscribers
Maturity benefits remain tax-free for original subscribers.
Applies only to primary issuance investors.
Secondary market investors subject to capital gains tax.
Exemption applies even if held till maturity.
Capital Gains Tax for Secondary Market
Investors purchasing from secondary markets face taxation.
Short-term capital gains taxed as per slab rates.
Long-term capital gains taxed at 20% with indexation.
No exemption on maturity for secondary market purchases.
Impact on Investment Strategy
Considerations for SGB investors.
Evaluate benefits of primary vs secondary market purchases.
Long-term holding strategies may be affected.
Tax planning essential for maximizing returns.
Revised Securities Transaction Tax (STT) rates effective from April 2026.
Increased Rates for Derivatives
STT rates on futures and options trading have increased.
Sale of option (premium) increased from 0.1% to 0.15%.
Sale of option (intrinsic price) increased from 0.125% to 0.15%.
Sale of futures increased from 0.02% to 0.05%.
Impact on Traders
Higher transaction costs for traders in the F&O segment.
Increased cost of trading may affect profitability.
Traders need to adjust strategies to account for higher costs.
Potential reduction in trading volumes due to higher costs.
Comparison with Previous Rates
Understanding the rate changes.
Previous rates were lower, encouraging more trading.
New rates aim to increase government revenue.
Traders must reassess cost-benefit of transactions.
Updated digital payment security rules by the Reserve Bank of India.
Mandatory Two-Factor Authentication
2FA is now compulsory for all digital transactions.
Applies to UPI, debit cards, credit cards, and online banking.
Authentication methods include OTP, PIN, or biometric verification.
Enhances security against fraud and unauthorized access.
Impact on Users
Increased security measures for digital transactions.
Users need to ensure updated contact details for OTPs.
Potential delays in transaction processing due to additional steps.
Increased confidence in digital payment systems.
Compliance Requirements
Banks and financial institutions must comply with new rules.
Institutions must update systems to support 2FA.
Regular audits to ensure compliance with RBI guidelines.
Penalties for non-compliance may be imposed.
Updated due dates for filing Income Tax Returns from April 2026.
Extended Deadlines for ITR-3 and ITR-4
Non-audit cases have an extended filing deadline.
Due date extended to 31 August for FY 2025-26.
Applies to individuals and HUFs with business income.
Allows more time for accurate filing and compliance.
Unchanged Deadlines for ITR-1 and ITR-2
No changes to filing deadlines for simpler returns.
Due date remains 31 July for salaried individuals.
Applies to individuals with income from salary, house property, etc.
Ensures timely processing of refunds and assessments.
Tax Audit Cases
Filing deadlines for audit cases remain consistent.
Due date for tax audit cases remains 31 October.
Applies to businesses and professionals requiring audit.
Ensures thorough audit and compliance with tax laws.
Changes in Tax Collected at Source (TCS) for foreign education and medical expenses.
Reduced TCS for Education Abroad
Lower TCS rates for remittances under LRS for education.
TCS rate reduced from 5% to 2%.
Applies to remittances for educational purposes.
Encourages higher education opportunities abroad.
Reduced TCS for Medical Treatment Abroad
Lower TCS rates for remittances under LRS for medical expenses.
TCS rate reduced from 5% to 2%.
Applies to remittances for medical treatment.
Reduces financial burden on families seeking treatment abroad.
Impact on Remittance Planning
Considerations for individuals planning foreign remittances.
Lower TCS rates reduce overall cost of remittances.
Encourages timely planning and execution of remittances.
Beneficial for families with educational or medical needs abroad.
Simplified submission process for Form 15G and Form 15H.
Centralized Submission Process
Forms can now be submitted directly to depositories.
Reduces duplication of form submission.
Forms shared across institutions through NSDL/CDSL.
Simplifies TDS compliance for individuals.
Benefits for Investors
Streamlined process benefits investors with non-taxable income.
Avoids excess TDS deductions on interest income.
Ensures timely submission and processing of forms.
Reduces administrative burden on investors.
Impact on Financial Institutions
Institutions must adapt to new submission processes.
Systems updated to receive forms from depositories.
Ensures compliance with updated submission guidelines.
Improves efficiency in TDS processing and management.
Revised annual pass fee for FASTag from FY 2026-27.
Increased Fee for Non-Commercial Vehicles
Annual pass fee has been increased for eligible vehicles.
Fee increased from ₹3,000 to ₹3,075.
Applies to non-commercial vehicles with valid FASTag.
Ensures continued access to toll facilities.
Impact on Vehicle Owners
Considerations for vehicle owners using FASTag.
Slight increase in annual toll expenses.
Convenience of cashless toll payments remains.
Encourages continued use of digital toll systems.
Comparison with Previous Fees
Understanding the fee increase.
Previous fee was ₹3,000, now increased by ₹75.
Increment aims to cover operational costs.
Minimal impact on overall toll expenses.
What is the new tax regime under the Income Tax Act, 2025?
The new tax regime offers lower tax rates without deductions. For example, an income of ₹10 lakh is taxed at ₹75,000 under the new regime, compared to ₹85,800 under the old regime with deductions.
How does the SGB taxation change affect investors?
Original subscribers continue to enjoy tax-free maturity benefits, while secondary market investors are subject to capital gains tax, even if held till maturity.
What are the revised STT rates for derivatives?
Effective April 2026, the STT on sale of options (premium) is 0.15%, on sale of options (intrinsic price) is 0.15%, and on sale of futures is 0.05%.
What changes have been made to the ITR filing deadlines?
For FY 2025-26, the ITR-3 and ITR-4 filing deadline is extended to 31 August, while the deadlines for ITR-1 and ITR-2 remain 31 July.
What is the impact of reduced TCS on foreign education expenses?
The TCS rate on remittances for education abroad is reduced from 5% to 2%, lowering the cost of sending money for educational purposes.
How does the new submission process for Form 15G and 15H work?
Forms can now be submitted directly to depositories, which share the details across financial institutions, simplifying the TDS compliance process.
What is the revised FASTag annual pass fee?
The annual pass fee for non-commercial vehicles with FASTag is increased from ₹3,000 to ₹3,075, applicable from FY 2026-27.
How does the RBI's new digital payment rule affect transactions?
The mandatory two-factor authentication (2FA) enhances security for digital transactions, requiring OTP, PIN, or biometric verification for UPI, debit, and credit card payments.