April 1, 2026: India’s New Financial Rules & Tax Changes Explained | Mint

New financial and tax regulations take effect across India today, April 1, 2026, impacting a wide range of citizens from salaried employees to investors and travelers. The changes, coinciding with the start of fiscal year 2026-27, represent a significant overhaul of existing systems, most notably with the full implementation of the new Income Tax Act, 2025.

The new Income Tax Act replaces the 1961 legislation, aiming to simplify the tax code. A key change is the consolidation of the ‘Assessment Year’ (AY) and ‘Previous Year’ (PY) into a single ‘Tax Year,’ intended to reduce confusion for taxpayers. The Act as well features a reduced number of sections, dropping from 819 to 536, and utilizes clearer language to improve accessibility, according to government officials.

Alongside the income tax reforms, substantial changes are being introduced to India’s labor laws. These revisions are expected to affect in-hand salaries, gratuity calculations, and full and final settlement procedures for employees. Details of the specific labor law changes remain forthcoming, but officials have indicated a sweeping set of reforms are now in effect.

Regulations surrounding Permanent Account Number (PAN) applications have also been tightened, though specific details of the new rules were not immediately available. The government has emphasized the importance of PAN compliance for all financial transactions.

Travelers will also experience changes, as Indian Railways has implemented a new policy eliminating refunds for train tickets cancelled within eight hours of departure, a reduction from the previous four-hour window. This change is expected to impact travel planning and budgeting for passengers across the country.

Financial instruments are also subject to new rules. Capital gains on Sovereign Gold Bonds (SGBs) purchased from the secondary market will now be taxable at maturity, while primary purchases directly from the Reserve Bank of India (RBI) remain tax-free. Remittances for medical treatment abroad will now be subject to a 2% Tax Collected at Source (TCS), reducing the immediate financial burden on patients.

Salaried employees will see an increase in their monthly Provident Fund (EPF) deductions due to rising basic salaries. This increase is intended to bolster long-term retirement savings. The standard deduction for salaried individuals and pensioners has been enhanced to ₹75,000.

The excise duty cut on petrol and diesel is expected to provide some relief to oil marketing companies facing losses due to high crude prices. The long-term impact of this measure on fuel prices for consumers remains to be seen.

The government has also extended tax benefits for startups under Section 80-IAC and incentives for International Financial Services Centres (IFSCs) until March 31, 2030. Reporting requirements for cryptocurrency transactions have been tightened with the introduction of Section 285BAA, reflecting a growing focus on regulating the digital asset market.