From Filing Forms to Reporting Requirements, Everything in India's Tax Compliance System Changed Today — A Complete April 1, 2026 Checklist for Salaried Individuals
From Filing Forms to Reporting Requirements,
Everything Changed Today
A complete April 1, 2026 checklist for salaried individuals navigating India’s new Income Tax Act, 2025.
The Foundation Has Changed
The most foundational shift taking effect today is the replacement of the Income Tax Act, 1961 with the Income Tax Act, 2025. This is not a minor amendment — it is a complete legislative overhaul passed by Parliament that aims to simplify language, remove decades of redundant provisions, reduce legal disputes, and align the taxation framework with modern economic realities.
Tax slabs under both the old and new regime carry forward exactly as they were. The new act is primarily a structural and compliance overhaul — not a rate revision.
Forms, section numbers, terminology, and filing workflows have all shifted. Knowing the old system is no longer enough — this guide covers what changed and what you need to do.
Goodbye “Financial Year,” Hello “Tax Year”
One of the most visible terminological changes in the new law is the replacement of “Financial Year” (FY) and “Assessment Year” (AY) with a single unified concept: the Tax Year.
Income earned in FY 2025-26 was assessed in AY 2026-27 — a confusing two-year framework for many first-time filers. The new Income Tax Act, 2025 eliminates this dual-reference structure entirely. Income earned during a period is simply referred to under the Tax Year in which it is earned.
This alignment is expected to reduce calculation errors in advance tax and self-assessment. Pre-filled ITR data on the portal will also benefit from this clarity, particularly for employer-issued certificates.
Tax Slabs for Tax Year 2026-27
The income tax slabs for both regimes remain identical to last year. For salaried individuals on the new tax regime (which remains the default), here is the full structure:
| Income Range (₹) | Tax Rate — New Regime |
|---|---|
| Up to ₹4 lakh | NIL |
| ₹4 lakh – ₹8 lakh | 5% |
| ₹8 lakh – ₹12 lakh | 10% |
| ₹12 lakh – ₹16 lakh | 15% |
| ₹16 lakh – ₹20 lakh | 20% |
| ₹20 lakh – ₹24 lakh | 25% |
| Above ₹24 lakh | 30% |
Standard deduction of ₹75,000 + Section 87A rebate of up to ₹60,000 means salaried individuals earning up to ₹12.75 lakh effectively pay zero tax.
Perquisites & Allowances: The Real Raise
While slabs stayed flat, the Income Tax Rules, 2026 have dramatically revised the monetary limits on employer-provided perquisites and allowances — many of which had not been updated in decades. These revised limits apply to income earned from today.
Restructure your salary components to maximise tax-exempt portions under the revised limits — especially meal allowances, car perquisites, and children’s allowances.
HRA Gets a Major Expansion — 4 New Cities
From April 1, 2026, four more cities have been added to the 50% HRA exemption list, previously exclusive to Delhi, Mumbai, Chennai, and Kolkata. Employees in these IT and services hubs now stand on equal footing with their counterparts in India’s financial capitals.
From this tax year, taxpayers claiming HRA exemption must disclose their relationship with the landlord in their returns — designed to prevent fraudulent claims using family members’ rent receipts. Ensure your Form 12BB reflects accurate landlord information.
New ITR Forms for AY 2026-27
The Income Tax Department released updated ITR Forms 1, 2, 3, and 4 for AY 2026-27 on March 31, 2026. Here is what changed in the forms most relevant to salaried individuals:
- Primary and secondary mobile number and email now accepted
- Eligibility expanded to include up to two house properties (was one)
- Eligibility expanded to two house properties
- Form 10-IEA regime opt-in/out disclosure embedded directly into the form
Revised Filing Deadlines
The new regime brings meaningful changes to ITR filing deadlines for Tax Year 2026-27. Mark these dates carefully:
Filing a revised return after December 31, 2026 will attract an additional fee. Try to revise before year-end if possible.
TCS Rationalisation: Simpler Rates
Tax Collected at Source (TCS) rules have been streamlined. This primarily affects salaried individuals who remit money abroad for education, medical treatment, travel, or lifestyle expenses via the Liberalised Remittance Scheme (LRS).
A uniform 2% across most LRS categories makes cash flow planning significantly cleaner, reducing unnecessary refund wait times at filing.
Two Investor-Adjacent Changes
Two additional changes are worth flagging for salaried employees who also invest actively in equities or mutual funds:
📦 Share Buybacks → Capital Gains
Prior to today, amounts received from share buybacks were treated as deemed dividends and taxed at slab rates. Effective April 1, 2026, buyback proceeds are taxed as capital gains — at 30% for individual promoters and 22% for corporate promoters. Indexation benefits may apply depending on holding period.
🚫 No Interest Deduction on Dividends
If you earn dividend income from mutual funds or stocks and have taken a loan to finance those investments, you can no longer deduct the interest on that loan against your dividend income. This changes the net tax math for leveraged investors who previously claimed this deduction.
Your Complete Action Checklist
April 1, 2026 — Action List
Click each item to mark it complete.
