By Admin 
Income Tax Rules Change from 1st April: The new business year 2026-27 is starting from April 1, 2026. The Income Tax Act, 2025 will also come into force from the same day. Under this, many rules related to Income Tax, Investment, TDS/TCS and companies will change. These changes will affect everyone from salary earners to investors, business people and companies.
New method of tax on share buyback
Till now, the earnings from share buyback were considered as dividend income and were taxed as per the income tax slab. From April 1, 2026, the benefits from buyback will be considered as capital gains, which means that like stock trading, tax on them will be calculated on the basis of purchase price and holding period.
Increase in STT
Securities Transaction Tax (STT) on futures deals in securities has been increased. Under the new rule, the futures trading STT has been increased from 0.02 percent to 0.05 percent. No exemption has been given to those doing options trading. In the budget, the government has proposed to increase the options premium STT 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 interest expenses on dividend or mutual fund income, even if the investment is made with borrowed money. Earlier tax deduction was available on this. This new rule will also come into effect from April 1, 2026.
New rules for Sovereign Gold Bond (SGB)
Under the new rule, now tax exemption on SGB will be available only on those bonds which are purchased directly from the government. Capital gains tax will be levied on redemption on SGBs purchased from the secondary market. Investors will have to wait till maturity to avail tax-free returns.
Relief from repeated declaration
Now investors will be able to submit a single declaration to avoid TDS instead of filling multiple forms for different income sources like: This means that to avoid tax deduction, you will not have to fill different forms again and again. Mutual funds, dividends, bonds will all be covered in a single declaration. This will simplify the paperwork and ease compliance.
Buying property from NRI becomes easier
Under the new rule coming into effect from April 1, 2026, there will be no need to obtain TAN for deducting TDS while purchasing property from a Non-Resident Indian (NRI). Now buyers will be able to deduct TDS using only PAN. Overall, cross-border property transactions will be easier.
Reduction in TCS on foreign expenditure
TCS on foreign tour packages has been reduced to 2 percent. Under the Liberalized Remittance Scheme (LRS), TCS on foreign studies and medical expenses has been reduced from 5 percent to 2 percent. This will reduce the expenses on travel, studies and medical treatment abroad.
Relief on PF and ESI employer contribution
Now the employer will continue to get tax deduction on PF and ESI contribution till the deadline of ITR filing. This will reduce financial penalties and compliance risks for employers.
Interest received on motor accident compensation tax-free
The interest received on the compensation given by the Motor Accident Claims Tribunal (MACT) will now be completely tax-free and no TDS will be deducted on it. That means accident victims will get full compensation without any tax deduction.
ITR filing deadline extended
Unaudited businesses and trusts will now be able to file ITR by August 31 instead of July 31. The deadline for salary earners will remain 31st July only. The deadline for filing revised returns has been extended to March 31 instead of December 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 final corporate tax
Minimum Alternate Tax (MAT) for companies will now be 14 percent final tax. No further new MAT credit will be given. However, the existing MAT credit can be used till March 31, 2026.
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