FY27: New Financial Rules & Tax Changes in India – What’s Changing April 1st?

India’s national highway toll plazas transitioned to a cashless payment system today, April 1, 2026, as part of a broader push to modernize the country’s infrastructure and financial regulations. The move coincides with the implementation of several new financial rules marking the start of the 2026-27 fiscal year.

The shift to cashless tolling relies heavily on the FASTag electronic toll collection system. However, the annual pass fee for FASTag users has been revised upwards, taking effect today, according to recent announcements. The new rates reflect adjustments for the upcoming fiscal year.

Alongside the changes to toll collection, a significant overhaul of India’s tax system came into effect today with the introduction of the Income Tax Act, 2025, replacing the six-decade-aged Income Tax Act of 1961. The new Act aims to simplify the tax framework, removing redundant provisions and utilizing more accessible language. The Act retains existing slab rates for taxpayers.

The new legislation also renames the Assessment Year (AY) and Financial Year (FY) to “Tax Year” to reduce confusion. Further impacting salaried individuals, new labor codes require companies to allocate at least 50% of an employee’s salary to the basic wage component, which will increase provident fund contributions and potentially reduce take-home pay.

Changes to tax documentation are also being implemented. Form 130 will now replace Form 16 as the primary Tax Deducted at Source (TDS) certificate for senior citizens and salaried employees, with employers and banks mandated to issue the certificates by June 15th of each financial year.

Financial institutions are also enacting changes. HDFC Bank will now charge ₹23 per transaction for UPI cash withdrawals at ATMs after the first five free transactions.

Analysts predict that India’s national highway toll revenue may exceed ₹1 trillion in FY27, driven by increased traffic and the adoption of technology like FASTag. The government anticipates these changes will streamline financial processes and improve efficiency across various sectors.