Context:

• With the start of the new financial year on 1 April 2026 in India, several major changes affecting the financial life of the common people have come into effect.

Important Changes:

Income Tax Act, 2025:

• The Income Tax Act, 2025 has come into force, replacing the Income Tax Act, 1961.
• Under the new tax regime, there will be no tax on annual income up to ₹12 lakh.
• The terms ‘Financial Year’ and ‘Assessment Year’ have been replaced with a single term, ‘Tax Year’.
• New simplified forms have been introduced in place of old ones. Form 16 is now Form 130, and Form 26AS is now Form 168.

Changes in ITR Filing Deadlines:

• The last date for salaried individuals remains 31 July, while for other taxpayers it is 31 August.
• For cases requiring audit, the deadline is 31 October.
• The tax exemption limit on gifts and vouchers has been increased to ₹15,000, from the earlier ₹5,000.

PAN and HRA:

• Additional documents are now mandatory for obtaining a PAN card.
• For claiming HRA exemption, it is now mandatory to provide the landlord’s PAN details.
• Bengaluru, Hyderabad, Pune, and Ahmedabad have been included as metro cities, allowing residents to claim up to 50% HRA exemption.

Banking and UPI:

• Two-Factor Authentication (2FA) has been made mandatory for all digital payments and UPI transactions.
• Charges will now apply on UPI-based cash withdrawals from ATMs beyond the free transaction limit.

Railway Rules:

• Refund rules have been tightened—tickets must be cancelled at least 8 hours before departure to get a refund. No refund will be provided if cancelled within 8 hours.
• The facility to change the boarding station is now available up to 30 minutes before departure.

FASTag and Toll:

• FASTag has become costlier, now priced at ₹3,075 instead of ₹3,000.
• Cash payment at toll plazas has been completely discontinued.

Costlier Items:

• Luxury watches, imported liquor, and cigarettes have become more expensive due to higher taxes.

Cheaper Items:

• Electronic goods (smartphones, tablets) and some medicines have become cheaper.

Financial Year 2026–27:

• In India, the financial year begins on 1 April and ends on 31 March of the following year.
• The financial year 2026–27 has started from 1 April 2026.
• Historical Background: India adopted this system in 1867 following the British system. Before that, the financial year ran from 1 May to 30 April.
• Budget Session: The Union Budget is presented on
• the first day of February so that it can be implemented from 1 April.
• L.K. Jha Committee (1984): This committee recommended starting the financial year from 1 January (to align with the monsoon cycle), but it was not implemented.

Major Countries and Their Financial Year Periods: