New Financial Changes From April 1: Income Tax, ATM Charges, PAN Rules, LPG Prices & More

A series of major reforms to India's labour and tax systems will take effect on April 1, 2026, including the rollout of the new Income Tax Act 2025, revised rebate limits, updated compliance forms, and changes to banking and travel rules. Since these updates will directly affect everyday financial transactions, it is important to stay informed.

10 Key Financial Changes From April 1, 2026

1. New Income Tax Law

At the heart of these reforms is the replacement of the six-decade-old Income-tax Act, 1961, with the modernised Income Tax Act, 2025. The new law aims to simplify compliance and align India's tax system with global standards. Terms like 'Assessment Year' and 'Previous Year' will be replaced by a simpler 'Tax Year' concept. For example, income earned between April 1, 2026, and March 31, 2027, will be referred to as Tax Year 2026-27.

The Act, which received Presidential assent in August 2025, reduces the number of sections from 819 to 536 and chapters from 47 to 23.

2. Income up to Rs 12 lakh effectively tax-free

Under the revised regime, individuals earning up to Rs 12 lakh will effectively pay no tax due to a higher rebate under Section 87A. Additionally, a standard deduction of Rs 75,000 provides further relief for salaried taxpayers. Tax slabs now begin with zero tax on the first Rs 4 lakh, with rates gradually increasing to 30% for higher-income brackets.

3. Changes in TDS document formats

To simplify tax documentation, Form 16 will be renamed Form 130, and Form 16A will become Form 131. These updates aim to streamline reporting for salary and interest income and make tax paperwork easier to understand.

4. Stricter PAN card application rules

From April 1, 2026, Aadhaar will no longer be enough as proof of date of birth for PAN applications. Applicants must also submit valid documents such as a Class 10 certificate, passport, or birth certificate.

5. Revised TCS rates for international travel

Earlier, overseas tour packages attracted 5% TCS for amounts up to Rs 7 lakh and 20% beyond that. From April 1, a flat 2% rate will apply, with no minimum threshold.

6. Tax changes in Sovereign Gold Bonds (SGBs)

Previously, capital gains on SGBs at maturity were fully tax-free. Going forward, this exemption will apply only to investments made directly through RBI primary issuances. Gains from SGBs purchased via stock exchanges will now be taxed, either as long-term capital gains at 12.5% or as short-term gains added to income, depending on the holding period.

7. ATM withdrawal rule changes

Banks are revising ATM withdrawal policies. HDFC Bank will now include UPI ATM withdrawals within the free transaction limit; beyond five free transactions, a fee of Rs 23 will apply per withdrawal.

Bandhan Bank will allow three free transactions in metro cities and five in non-metros, with Rs 23 charged for additional transactions. Failed transactions due to insufficient balance may attract a Rs 25 fee.

Punjab National Bank has also revised withdrawal limits, setting them between Rs 50,000 and Rs 75,000 depending on the card type, instead of the earlier Rs 1 lakh cap.

8. Extended deadline for revised ITR filing

Taxpayers will now get up to 12 months (instead of 9 months) from the end of the tax year to file a revised return. However, filing after the initial 9-month period will attract a penalty fee.

9. Possible LPG price revisions

LPG cylinder prices may see changes from April 1, influenced by global factors such as the ongoing US-Iran conflict.

10. Stricter train ticket cancellation rules

Indian Railways has tightened refund rules. Tickets cancelled within 8 hours of departure will now attract zero refund, compared to the earlier 4-hour window.