April 1 Money Rules: 5 Major Changes to Income Tax and Banking in India

As India approaches the end of the current fiscal year, changes in personal finance, taxation, and banking are set to take effect on April 1, 2026. From the implementation of the landmark Income Tax Act, 2025, to new rules for investors and travelers, here are the major changes that will impact your wallet.

1. End of the Income Tax Act, 2025

The six-decade-old Income Tax Act of 1961 will be officially replaced by the Income Tax Act, 2025. While the primary goal is to simplify compliance through clearer language and digital-first procedures, the core tax slab structure under the New Tax Regime remains largely unchanged. However, with the enhanced Section 87A rebate of ₹60,000, salaried individuals earning up to ₹12.75 lakh (including the standard deduction) will continue to effectively pay zero tax.

2. Share Buybacks

Investors must brace for a fundamental change in how they are taxed on share buybacks. Currently treated as "deemed dividends," buyback proceeds will now be taxed as Capital Gains in the hands of the shareholder.

• Long-Term Capital Gains (LTCG): Taxed at 12.5% after a ₹1.25 lakh exemption.
• Short-Term Capital Gains (STCG): Taxed at 20%.

3. Higher STT on F&O Trading

To curb excessive speculation in the derivatives segment, the government is hiking the Securities Transaction Tax (STT) on the equity derivatives segment effective April 1.

• Futures: Rate increases from 0.02% to 0.05%.
• Options: Rate increases from 0.1% to 0.15%.

4. Rationalized TCS on Overseas Travel

Planning international holidays will become procedurally simpler. The previous multi-rate structure for the Liberalised Remittance Scheme (LRS) for overseas tour packages is being replaced by a flat 2% TCS rate, regardless of the threshold. A similar 2% rate will now apply to remittances for overseas education and medical treatment.

5. New Perks Taxation & Banking Perks End

• Employer Contributions: If an employer’s total contribution to EPF, NPS, and Superannuation funds exceeds ₹7.5 lakh in a financial year, the excess amount (plus any interest earned on it) will be taxed as a perquisite.
• Lounge Access: Several major banks, including HDFC Bank and PNB, will discontinue complimentary lounge access for RuPay Platinum debit cards from April 1. Access will now be strictly spend-based or moved to premium, customized card offerings.

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