New Tax Rules effective from 1st Apr 2026

1. Implementation of New Income Tax Act 2025

• The long-awaited Income Tax Act 2025 will take effect on April 1, 2026, and will replace the previous Income Tax Act 1961.
• Also, the new Income Tax rules and forms will be approved and effective on April 1, 2026.
• The new law implements structural reorganization, streamlined drafting, and procedural reforms.

✅ Refer Income Tax Act 2025 — Portal for more information.

2. Updated Income Tax Returns for last 5 years

• Beginning April 1, 2026, taxpayers will be unable to file updated income tax returns for FY 2020-21 (AY 2021-22).
• The penalty for filing updated income tax returns for FY 2021-22, FY 2022-23, FY 2023-24, and FY 2024-25 changes as follows.

✅ Refer Updated Return for more information.

3. Income Tax Return Filing due dates

• Staggered income tax filing due dates were announced in Budget 2026, and they are applicable from April 1, 2026 (Applicable for AY 2026-27 Income tax returns).
  • ITR - 1 & ITR - 2 — due by 31 July
  • Non-audit cases (ITR - 3, ITR – 4, ITR-5) and trusts — due by 31st August
• The taxpayers can file revised returns starting from AY 2027-28 until 31st March with a nominal fee

✅ Refer Tax Threshold Limits & Due Dates for more information.

4. Increase in STT in derivative transactions

The derivative traders are required to pay higher STT on trading w.e.f 01st April 2026

• Futures STT: 0.02% → 0.05% 🔺
• Options Premium STT: 0.10% → 0.15% 🔺
• Options Exercise STT: 0.13% (0.125%) → 0.15% 🔺

✅ Refer Indian Budget 2026 Presentation for more information.

5. Company Compliance Facilitation Scheme (CCFS -2026)

• From April 1, 2026, CCFS-2026 offers defaulting companies a one-time opportunity for filing pending ROC forms with reduced additional fees and relief from penalties/prosecution.
• It also provides a concessional route for strike-off (STK-2) for defunct companies, which aids in compliance and avoids director disqualifications.

✅ Refer Companies Compliance Facilitation Scheme (CCFS) — 2026 for more information.

6. Taxability of Sovereign gold bonds and other taxation changes

• From April 1, 2026, capital gains on redemption of Sovereign Gold Bonds (SGB) are exempt only if the bonds were issued by the RBI in the initial issuance.

  SGBs purchased in the secondary market will not be excluded, and capital gains will be taxed.

• The amount received by taxpayers on the buyback of shares by the company is taxable under the head "Capital gains"
• Interest income awarded under the Motor Vehicles Act of 1988 is exempt in the hands of individual and legal heirs, and no TDS is deducted.

✅ Refer Gold Taxability and its Holding Limits for more information

7. New TCS Rates

The revised TCS rates will be applicable from 01st April 2026

• Alcoholic liquor → 2% 🔺
• Scrap → 2% 🔻
• Coal/Lignite/Iron ore → 2% 🔺
• Tendu leaves → 2% 🔻
• LRS (education/medical) → 2% 🔻
• Overseas tour packages → 2% 🔻

✅ Refer TCS On Receipts for more information.

8. File Letter of Undertaking (LUT) for FY 2026-27

If you are a taxpayer who is registered under GST and has exports and sales to SEZs, you are required to submit a LUT for the FY 2026-27.

✅ Refer Export of Goods and Services under GST for more information

9. Conversion of Regular GST to Composition Scheme

If you are a taxpayer who is registered under regular GST and wishes to transition to the Composition scheme for the FY 2026-27, you must submit CMP-02 by March 31, 2026.

W.e.f 01st April 2025, you cannot opt to composition scheme for FY 2026-27.

✅ Refer Regular GST to Composition Scheme for more information.

10. Starting a New Business

To ensure seamless compliance, it is necessary to complete all necessary registrations, such as business registration, GST, PAN, and paperwork, by March 31, 2026, if you intend to establish a new business in the upcoming financial year.

✅ Refer Starting a new business steps for more information.

11. Reconciliation of Income Tax, GST etc

The taxpayers are required to reconcile the sales reported in GSTR 1, GSTR 3B, GSTR 2A/2B, Form 26AS, invoices issued and Bank Statements and need to do corrections if any required

12. Respond to Income Tax Notices

• The majority of scrutiny notices are subject to a due date of March 31, 2026. Therefore, it is recommended that taxpayers whose PANs have been selected for scrutiny exercise greater caution and promptly respond to notices in order to prevent penalties and significant outstanding demands.
• Additionally, taxpayers who are in disagreement with the orders issued by the Income Tax Department are obligated to submit an appeal.

✅ Refer How to Handle Income Tax (IT) Department Notices? for more information.