As the new financial year 2026-27 (FY27) begins on Wednesday, 1 April, India is set to witness the implementation of several new financial and regulatory rules. These changes are expected to directly impact the day-to-day lives of citizens across the country.
From changes in income tax return (ITR) filing norms and PAN regulations to revisions in salary structure and FASTag annual pass fee hike, multiple policy changes will come into effect with the start of FY27, influencing household finances as well as banking and compliance practices.
Meanwhile, banks will also make a host of new changes to crucial tasks such as ATM cash withdrawal limit. For example, HDFC Bank will now charge ₹23 per transaction on UPI cash withdrawals at ATMs after five free transactions.
What Changes in New Income Tax Act 2026?
Among the key changes, India’s six-decade-old tax framework under the Income Tax Act, 1961 will be replaced by the newly introduced Income Tax Act, 2025, on 1 April, marking a significant overhaul of the country’s direct tax system.
The Act has done away with redundant provisions and archaic language, introducing a simpler language for common people. A major change in the Income Tax Act, 2025, is the renaming of Assessment Year (AY) and Financial Year (FY) to Tax Year, so as to avoid confusions.
It retains the existing slab rates for salaried individuals, businesspersons, professionals and other taxpayers.
What impact does it have on your take-home salary?
Under the ‘wages’ section of the four new labour codes brought in by the government, companies will now have to pay at least 50% of your salary as the basic wage component. The latest change means that your provident fund contribution will increase, effectively reducing in-hand salary of a person.
Some other changes that are expected to impact a taxpayer’s lives include changes to House Rent Allowance (HRA) rules, new ticketing reforms introduced by Indian railways, and others.
TDS form change: What replaces Form 16?
Form 130 will officially replace Form 16 as the primary Tax Deducted at Source (TDS) certificate for senior citizens and salaried employees from FY 2026–27 onwards.
It will be issued by employers to salaried individuals, and specified banks to eligible senior citizens. Once TDS is deducted and deposited, issuance of this certificate is mandatory by 15 June of the financial year.
