Income tax rules 2026: 19 key changes from April 1 investors and salaried employees must know By Sangeeta Ojha March 28,2026

 From April 1, 2026, India’s six-decade-old Income-tax Act, 1961, will be replaced by the new Income-tax Act, 2025, marking a major reform in the country’s tax system. FREEmat Account within minutes!

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Separately, the Union Budget 2026, presented by Finance Minister Nirmala Sitharaman on February 1, 2025, introduced a different set of measures affecting taxation, including the treatment of share buybacks, dividends, TCS, and capital gains.

In this article, we take a closer look at the key income tax changes coming into effect from April 1, 2026, breaking down what’s new, what has been revised, and how these changes could impact your finances, investments, and tax planning for the year ahead.

19 key income tax changes from April 1, 2026

1) Income Tax Act 2025 replaces the 1961 Act

From April 1, 2026, India’s six-decade-old Income-tax Act, 1961, will be replaced by the new Income-tax Act, 2025. While tax rates and income slabs remain unchanged, the new law modernises how individuals, companies, and investors calculate taxes, report income, and comply with TDS/TCS rules.

2) Tax Year

The new law introduces a single term called “Tax Year,” replacing the older dual system of Financial Year (FY) and Assessment Year (AY). Income earned from April 1 onwards will be reported under the tax year.

3) House Rent Allowance (HRA) changes

HRA benefits are still available, but stricter rules are now in place. Employees must provide their landlord’s PAN and proof of rent payments. In certain cases, it is mandatory to disclose the landlord’s details, including PAN and the rent paid, when claiming HRA

4) HRA metro city expansion

The list of “metro cities” eligible for 50% exemption now includes Mumbai, Delhi, Kolkata, Chennai, Bengaluru, Hyderabad, Pune, and Ahmedabad. ( Read more)

5) Meal cards exemption increased

Corporate meal cards costing up to ₹200 per meal are tax-free under the old tax regime. This includes free food and non-alcoholic beverages provided to employees. Previously, the exemption was only ₹50 per meal.

6) Gift and festival vouchers

The tax-free annual exemption for corporate gift cards, vouchers, or coupons has increased from ₹5,000 to ₹15,000 per employee. This applies under both old and new tax regimes.

7) Children’s allowances

Children's education allowance has increased from ₹100 per month per child to ₹3,000 per month, while hostel expenditure allowance has increased from ₹300 per month to ₹9,000 per month under the old tax regime.

8) Company vehicle perquisites

Under the new Income-tax Act, 2025, the taxable value of company-provided vehicles has been revised. For cars with engines up to 1.6 litres, the perquisite value is ₹8,000 per month, while larger vehicles with engines above 1.6 litres will have a perquisite valuation of ₹10,000 per month. If the employer provides a driver along with the vehicle, the taxable value of the driver’s services has also been increased to ₹3,000 per month.

This applies to both personal and professional use of the vehicle and is calculated under the old and new tax regimes. ( Read more)

9) PAN rule changes

Aadhaar-only PAN applications are no longer allowed, and applicants must use category-specific forms, Form 93 for individuals, 94 for companies, 95 for foreign individuals, and 96 for foreign entities.

PAN is also mandatory for high-value transactions such as cash deposits of ₹10 lakh or more per year, vehicle purchases over ₹5 lakh, hotel or event payments over ₹1 lakh, and immovable property purchases over ₹20 lakh. ( Read more)

10) Share buybacks taxed as capital gains

Proceeds from share buybacks will now be taxed as capital gains, replacing the previous “deemed dividend” treatment. Promoter shareholders pay differential buyback tax: 22% for corporate promoters and 30% for non-corporate promoters.

11) Securities Transaction Tax (STT) hike

STT on equity derivatives has increased: futures rise from 0.02% to 0.05% and options from 0.1% to 0.15%. This impacts active traders in futures and options (F&O).

12) Sovereign Gold Bonds (SGBs)

Tax exemption on redemption of SGBs now applies only to bonds purchased at the original issue. Secondary market redemptions will attract capital gains tax.

13) Dividend and mutual fund income

Income from dividends and mutual funds will be computed without allowing any deduction for interest expenditure, irrespective of borrowing.

14) Single declaration for non-deduction

Investors can now submit a single declaration for non-deduction of tax across all mutual fund units, dividends, and bonds.

15) Simplified TDS on property purchase

Buyers purchasing immovable property from NRIs can now deduct TDS using their own PAN, removing the need for a TAN and easing compliance.

16) TCS rationalisation

TCS rates have been rationalised:

• Overseas tour packages reduced from dual 5%,20% rates to a flat 2%.

• LRS remittances for education and medical purposes reduced from 5% to 2%.

• Alcoholic drinks increased from 1% to 2%.

17) Motor accident compensation

Interest from motor accident claims tribunal awards is fully tax-exempt, with no TDS deducted, so you receive the entire amount

18) Extended ITR filing deadlines

For non-audit taxpayers, including businesses and trusts, the ITR deadline is extended to August 31. Salaried individuals continue to file by July 31, while audit deadlines remain October 31.

19) Credit card rules

From April 1, 2026, high-value credit card payments will be reported to the tax department, over ₹10 lakh by non-cash methods or ₹1 lakh in cash. Credit card statements (up to 3 months old) can be used as proof of address for PAN applications. A PAN is now mandatory for all new credit card applications. ( Read more)

The Income Tax Department has clarified that its e-filing portal will support compliance under both the old and new Income Tax Acts. All assessments, appeals, and proceedings for earlier years will continue under the old Act until they are fully resolved. Taxpayers filing returns for AY 2026-27, which falls under the old Act, will use the prescribed forms for the old Act when filing in July 2026

PM Modi-Xi Jinping meet: From trade to rare earths, big issues on the table:--

 

Prime Minister Narendra Modi landed in Tianjin on Saturday for his first visit to China in seven years, ahead of the Shanghai Cooperation Organisation (SCO) Summit. His most closely watched engagement will be Sunday’s meeting with President Xi Jinping, as both sides seek to repair ties strained by border tensions and global economic shifts. Discussions are expected to cover trade, rare earths, and terrorism, while steps are being taken to normalise people-to-people exchanges, restore flights, and open channels for dialogue.

India-China SCO Meet News Live Updates: Putin arrives in China for summit hosted by Xi: Russian state media:-

 

India-China SCO Meet News Live Updates: Russian President Vladimir Putin landed in the northern Chinese city of Tianjin on Sunday to attend a summit hosted by counterpart Xi Jinping with around 20 other world leaders, Russian state media reported.

Chandrayaan-5 Mission: India & Japan's big leap to the Moon; what they’ll discover, how it will launch, and every detail inside :--

 

India and Japan have formalised an agreement for the Chandrayaan-5 mission, also known as the Lunar Polar Exploration (LUPEX) mission, to jointly explore the Moon’s south pole. ISRO and JAXA will collaborate to study volatile materials, particularly water, in the permanently shadowed regions.

Japan visit will be remembered for productive outcomes: PM Modi :-ET

 

Narendra Modi completed his two-day Japan visit. He thanked Japanese PM Shigeru Ishiba for the hospitality. Both leaders reviewed the India-Japan partnership, focusing on various sectors. Japan pledged a $68 billion investment in India. They explored collaboration in semiconductors and clean energy. Modi and Ishiba visited a semiconductor factory. Modi also interacted with the Indian community in Sendai.

Israeli airstrike kills Houthi rebel prime minister in Sanaa :-

 

Houthis claim an Israeli airstrike killed their Prime Minister, Ahmed al-Rahawi, in Sanaa. The strike also killed several ministers. Israel stated it targeted a Houthi military target. This attack follows increased tensions. Houthis have launched missiles at Israel during the Gaza conflict. Israel and its allies have responded with strikes on Houthi-controlled areas.

NCN REPORT ON RHI MAGNESITA INDIA LIMITED Q 1 RESULTS

 

RHI Magnesita India Limited reports mixed Q1 FY26 results with revenue growth and profit decline

RHI Magnesita India, a leading refractory manufacturer, announced its Q1 FY26 results, reporting increased revenue alongside a significant decrease in net profit. 

Financial highlights

• Revenue Growth: Revenue increased by 14.29% year-over-year, reaching ₹8.00 billion from ₹7.00 billion in the previous year's first quarter, indicating strong demand.
• Profit Decline: Despite the revenue growth, net profit decreased by 43.01% year-over-year, to ₹465.00 million from ₹816.00 million in the same quarter last year.
• EBITDA and Margin Compression: EBITDA declined from ₹1.30 billion to ₹821.00 million, resulting in a significant EBITDA margin compression from 18.32% to 10.19%. 

Analysis of performance

The disparity between revenue growth and declining profitability suggests potential challenges in maintaining profit margins. Factors potentially contributing to this include increased operational costs, shifts in the product mix, or pricing pressures within the refractory market. 

Strategic initiatives and outlook

RHI Magnesita India maintains a strong market position, holding a 30% share in the Indian refractory market. The company has made technological advancements, including deploying India's first complete robotic solution in a continuous casting system. Strategic acquisitions, such as acquiring Ashwath Technologies Private Limited for ₹14.12 crore, are aimed at enhancing capabilities. The Indian refractory market is expected to grow, offering opportunities for expansion. RHI Magnesita India has also started cost optimization programs focusing on various efficiencies. 

Management commentary

Parmod Sagar, Chairman, MD & CEO, highlighted the operating model's resilience in a competitive market. He expressed confidence in the company's market position and strategies for growth and productivity. Management is expected to address profitability challenges in future communications. 

NICAI UPDATES

 NICAI Updates;

 

​1. Bombay High Court held that serving order on chartered accountant doesn't count as service on assessee. The issue before the bench was whether the copy of the order passed by the Tribunal when served upon the Chartered Accountant is sufficient service and whether it can be construed as 'copy received by the assessee / applicant'.

​2. Justices Bharati Dangre and Nivedita P. Mehta stated that the Chartered Accountant since is not also authorised specifically to accept copy of the order, cannot be said to be a recognised agent of the Assessee.

​3. In this case, the applicant/assessee has filed an application for condonation of delay of 40 days in filing the appeals.

​4. The applicant/assessee along with her husband, were assessed to tax for the Assessment Year 2009-2010 and they having filed the Appeals before the Commissioner of Income Tax (Appeals), their appeals came to be allowed.

​5. The Income Tax Appellate Tribunal heard the Appeals of the Revenue, where the Assessees were represented by Sandeep Bhandare, a Chartered Accountant.

​6. The department submitted that the authorised representative of the applicant, Sandeep P. Bhandare, Chartered Accountant has received the copy of the order and therefore the Applicants cannot claim that they were unaware of the order passed.

​7. After looking into Rule 35 of the Income-tax (Appellate Tribunal) Rules, 1963 the bench observed that upon the order being passed under Section 254 by the Appellate Tribunal, it shall send a copy of the order to the assessee and even the Rules make it imperative for the Tribunal, after the order is signed to cause it to be communicated to the assessee and to the Commissioner.

​8. The bench further opined that “the parlance of Order 5 Rule 12 of CPC cannot be made applicable in the present case as Rule 12 contemplate an agent empowered to accept service and a Chartered Accountant definitely do not act as an agent of the assessee but he represent the assessee in the proceedings before the Income Tax Officer/Appellate Authority and there is no specific authorisation to a Chartered Accountant as it may be in case of a lawyer, who, by taking Vakalatnama, has agreed to accept documents on behalf of his client.”

​9. The bench opined that service upon the Chartered Accountant do not absolve the Tribunal of serving the copies of the order upon the assessee, who has adopted a specific stand that it is only upon receipt of the recovery notice the applicant gained knowledge about the impugned order and thereafter preferred an application for certified copy of the order which was received on 17.05.2024 and the appeal was preferred with a delay of 40 days.

​10. In view of the above, the bench allowed the application. Case Title: Mrs. Neelam Ajit Phatarpekar v. The Assistant Commissioner of Income Tax. Case Number: MISCELLANEOUS CIVIL APPLICATION NO.491 AND 492 OF 2024

By CA RAJ CHAWLA

Ahead of PM Modi's visit, Cabinet approves free trade agreement between India and UK:-livemint

 

As Prime Minister Narendra Modi prepares for his highly anticipated trip to the UK – his first since Keir Starmer came to power - the Cabinet on Tuesday approved the free trade agreement, news agency PTI reported, quoting sources. The pact, described by PM Modi as a "landmark deal," will be signed during the Prime Minister's visit to London this week. Commerce and Industry Minister Piyush Goyal will accompany Modi.

The two countries announced the conclusion of negotiations for the trade agreement on May 6, where Starmer had hailed it as Britain’s “biggest trade deal” since Brexit.

These discussions come at a time when the Trump dispensation in the United States is seeking to reshape global trade rules by imposing a wave of tariffs.

Once the free trade agreement is signed, it will require approval from the British Parliament before it can take effect. The India-UK free trade agreement (FTA) will come into force after signing and ratification by both countries.

India-UK Deal: What’s at stake

This move is likely to boost major industries such as textiles, leather, footwear, sports goods, toys, marine products, gems and jewellery, engineering goods, auto parts and engines, and organic chemicals.

Under the agreement, India will reduce tariffs on 90 per cent of British goods, with 85 per cent becoming completely duty-free over a period of 10 years. In return, Britain has agreed to lower its tariffs on certain products, resulting in 99 per cent of India's exports to the UK facing zero duties.

Currently, India-UK trade accounts for approximately 2 per cent of India's total trade, underscoring an underutilised partnership given the size and potential of both economies.

Currently, an 8-12 per cent duty is levied by the UK on apparel and home textiles imported from India. With tariffs being eliminated on 99 per cent of Indian goods, including textiles, incremental capacities are likely to be added in the next 4-5 years to execute orders.

Why China's neighbours are worried about its new mega-dam project:-ET

 

China has commenced construction on a massive $170 billion hydropower project on the Yarlung Zangbo River, raising concerns among downstream neighbors like India and Bangladesh about water security. The project, set to dwarf the Three Gorges Dam, aims to provide clean energy and stimulate China's economy.

China has broken ground on what it says will be the world's largest hydropower project, a $170  billion feat capable of generating enough electricity each year to power Britain.The scheme dwarfs the mighty Three Gorges Dam, currently the world's largest, and Chinese construction and engineering stocks surged after Premier Li Qiang unveiled it on the weekend.

Read more at:
https://economictimes.indiatimes.com/news/international/world-news/why-chinas-neighbours-are-worried-about-its-new-mega-dam-project/articleshow/122834905.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst