As people enter the new financial year, a wide range of major reforms are set to take place in the labour and tax systems, with effect from Apr. 1, 2026. Among these are the much-awaited rollout of the all-new Income-Tax Act, 2025, revised rebate limits, and changes to banking and travel rules.
Since these changes will directly impact the day-to-day lives of citizens, it is important to remain aware of them well in advance. Here's taking a look at 10 important financial updates that will affect your wallet from Apr. 1:
1. Income-Tax Act, 2025
This will replace the six-decade-old Income-Tax Act, 1961. It is aimed at further simplifying compliance and aligning the tax system of India with global standards. A major takeaway here is the replacement of terms like 'Assessment Year' and 'Previous Year' with the 'Tax Year' concept. This means that income earned by an individual between Apr. 1, 2026 and Mar. 31, 2027, gets referred to as Tax Year 2026-27. Further, it brings down the total number of sections from 819 to 536 as well as chapters from 47 to 23.
2. High Tax Rebate Benefit
Under the revised tax regime, those earning up to Rs 12 lakh will effectively pay no tax. This is due to the higher rebate under Section 87A. Moreover, the standard deduction of Rs 75,000 gives more relief to the salaried taxpayers.
3. TDS Forms Changed
Starting from Apr. 1, 2026, Form 16 has been replaced with Form 130, while Form 16A will become Form 131. This has been done to simplify the tax documentation process. Besides providing clarity in tax filings, these updates are aimed at streamlining reporting for salary and interest income and making tax paperwork easier.
4. Strict PAN Card Rules
As per the Income Tax Department, Aadhaar Card will no longer be enough as proof of date of birth for all PAN applications. This means that applicants will have to submit valid documents like Class 10 certificate, passport, or birth certificate.
5. Sovereign Gold Bonds (SGBs) Changes
While capital gains on SGBs at maturity were fully tax-free, this exemption will now apply to investments made directly via RBI primary issuances only. From Apr. 1 onward, gains from SGBs purchased through stock exchanges will now be taxed. This will be done either as long-term capital gains at 12.5% or as short-term gains added to income.
6. Revised TCS Rates For International Travel
Overseas tour packages earlier used to attract 5% TCS for amounts up to Rs 7 lakh and 20% beyond that. From Apr. 1 onward, flat 2% rate will apply, with no minimum threshold.
7. ATM Withdrawal Rules
Several banks have revised their ATM withdrawal policies. HDFC Bank said it will include UPI ATM withdrawals within the free transaction limit, while a fee of Rs 23 will apply per withdrawal beyond five free transactions.
Bandhan Bank will now allow three free transactions in metro cities and five in non-metros, while customers need to pay Rs 23 charged for additional transactions. Also, failed transactions due to insufficient balance might attract a Rs 25 fee.
8. Deadline For Revised ITR
In order to file a revised return, taxpayers now get up to 12 months (instead of nine months) from the end of the tax year. But they must note that filing after the initial nine-month period will attract a penalty.
9. LPG Price Revisions Expected
Amid the ongoing West Asia conflict, there are possibilities that LPG cylinder prices could see significant changes from Apr. 1.
10. Strict Rule For Train Ticket Cancellation Charges
The Indian Railways has tightened the refund rules. It will give zero refund for cancellations within 8 hours of departure, instead of the earlier 4 hours.
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