Budget 2026: New Income Tax Act 2025 Announced, Check 10 Major Changes Affecting Your Wallet
Budget 2026: Finance Minister Nirmala Sitharaman has presented the Union Budget for the fiscal year 2026-27. While there were no headline-grabbing announcements regarding changes to income tax slabs or exemptions, the framework of India’s taxation system is set for a historic overhaul. The decades-old Income Tax Act of 1961 is being scrapped. In its place, the new ‘Income Tax Act, 2025’ will come into effect from April 1, 2026.
The government aims to simplify the tax structure with this new act, making it easier for the common citizen to understand and file taxes without expert help. Beyond this structural shift, several specific changes have been announced that will directly impact investors, students, and property buyers. Here is a breakdown of the key changes.
Impact on Investors and Stock Market
Traders in the Futures and Options (F&O) segment will face higher costs. The Securities Transaction Tax (STT) on equity futures has been hiked from 0.02% to 0.05%, while for options, it has increased from 0.1% to 0.15%.
Rules regarding Sovereign Gold Bonds (SGBs) have also been tightened. The capital gains tax exemption on maturity will now be exclusive to investors who purchased the bonds during the original RBI issue. Those buying SGBs from the secondary market will no longer enjoy this tax-free benefit. Additionally, capital gains tax on share buybacks has been reinstated, though it will be calculated only on net profits, offering some relief to long-term investors.
Relief for Overseas Education and Property Buyers
There is significant relief for families sending money abroad for education or medical treatment. Under the Liberalized Remittance Scheme (LRS), the Tax Collected at Source (TCS) on such remittances has been slashed from 5% to 2%, effective April 1, 2026.
Buying property from Non-Resident Indians (NRIs) has also been simplified. Resident buyers will no longer need to obtain a Tax Deduction and Collection Account Number (TAN). Instead, the TDS deduction can be processed using just the PAN, streamlining the transaction process for ordinary citizens.
Compliance, Crypto Penalties, and ITR Deadlines
The government has introduced strict penalties for non-disclosure of cryptocurrency transactions. Crypto exchanges facing a fine of ₹200 per day for failing to report transactions, and up to ₹50,000 for reporting incorrect information.
On the compliance front, taxpayers have been given more breathing room to correct their mistakes. The deadline for filing revised returns has been extended from 9 months to 12 months. However, the timeline for belated returns remains unchanged. A new Foreign Asset Disclosure Scheme has also been launched, allowing a one-time, six-month window for taxpayers to declare foreign assets without facing litigation.
