The Ministry of Finance has replaced the Baggage Rules 2016 with new rules. On Monday, February 2, the ministry notified the "Customs Baggage (Declaration and Processing) Regulations, 2026". According to RSM India, a tax and accounting firm, the new rules have introduced provisions for re-import and temporary import of articles of personal effects (other than used personal effects required for satisfying the daily necessities of life).

"Domestic companies opting for concessional tax regime for the tax year 2026-27 and onwards shall be allowed to set-off MAT credit available as on 31 March 2026 to the extent of 25% of the tax payable for that tax year. The remaining tax credit shall be allowed to be carried forward to subsequent tax years and shall be eligible for set-off up to 15 tax years from the tax year immediately succeeding the tax year in which the credit became allowable," according to RSM India.

Budget 2026 has provided an exemption from income in respect of compulsory acquisition of any land under the RFCTLARR Act.

"In order to specifically provide exemption for acquisition of land under the provisions of Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, it is proposed to provide exemption to an individual or a Hindu undivided family on any income in respect of any award or agreement made on account of compulsory acquisition of any land under the said Act (other than the award or agreement made under section 46 of said Act."

Budget 2026 has reduced the tariff rate on all dutiable goods imported for personal use from 20% to 10%. SBI Research says, "The process of rationalization of customs duty has been further extended. The Budget exempts capital goods used for manufacturing Lithium-Ion Cells for batteries, imports of goods required for Nuclear Power Projects, capital goods required for processing of critical minerals and manufacture of civilian, training aircrafts from basic customs duty. Further, the Budget reduces the tariff rate on all dutiable goods imported for personal use from 20 per cent to 10 per cent."

The Income-tax Department says the exemption shall apply only where the Sovereign Gold Bond is held continuously until redemption on maturity. Premature redemption, even after completion of the prescribed lock-in period, shall not be eligible for exemption.

"The Finance Act provides for a revision in the rates of Securities Transaction Tax applicable to specified derivatives transactions carried out on recognised stock exchanges. The revised rates apply to the sale of options in securities, sale of options in securities where the option is exercised, and sale of futures in securities," the Income-tax Department says.

• The rate of Securities Transaction Tax on the sale of an option in securities has been increased from 0.1% to 0.15%, and the tax shall be computed on the option premium.

• The rate of Securities Transaction Tax on the sale of an option in securities where the option is exercised has been increased from 0.125% to 0.15%, and the tax shall be computed on the intrinsic price of the option.

• The rate of Securities Transaction Tax on the sale of a future in securities has been increased from 0.02% to 0.05%, and the tax shall be computed on the traded price of the future.

The revised STT rates will be effective April 1, 2026 and apply to derivatives transactions in securities entered into on or after that date

"In the new regime, marginal relief is available to only resident individuals who have income marginally above ₹12 lakh. For example, for a person having income of ₹12,10,000, in the absence of marginal relief, the tax, works out to be ₹61,500/- (5% of ₹4lakh + 10% of ₹4 lakh + 15% of ₹ 10,000). However, due to marginal relief, the amount of tax to be actually paid is ₹10,000," the Income-tax Department says after Budget 2026 presentation.

The Income-tax Department has cited F&O volume as the reason for the Government's decision to increase STT rates on futures and options.

In a post on X, the tax department said, "STT has been raised only on options and futures. The rate for futures now is 0.05 and for options is 0.15. The total volume of transaction in options and futures is more than 500 times of Indian GDP. In Rupee terms, our GDP is 300 lakh crore rupees. Volume for options and futures is more than 1.5 lakh crore rupees."

"Therefore there is justification for increase in rates to curb purely speculative activity in options and futures," it said.

CA Dr Suresh Surana says, the criteria for claiming capital gains tax exemption on Sovereign Gold Bonds (SGBs) have been amended under Section 70(1)(x) under the New Income Tax Act, 2025. He further says to qualify for the tax exemption on redemption, the following specific conditions must be met:

• Original Subscriber Only: The exemption is available only if the Sovereign Gold Bond was subscribed to by an individual at the time of the original issue,. Bonds acquired through secondary market transactions (transfer or purchase) are not eligible for this exemption. Held Until Maturity: The individual must hold the bond continuously until redemption on maturity. Premature redemption, even if done after the completion of the prescribed lock-in period, will not qualify for the exemption and will be taxable.

• Uniform Application: These amended provisions apply uniformly to all series of Sovereign Gold Bonds issued by the Reserve Bank of India from time to time.

• Based on the Income Tax Act, 1961, Income Tax Act, 2025, and Finance Bill 2026 (specifically the FAQs and Memorandum), here is the comparative analysis of the Capital Gains Tax exemption on Sovereign Gold Bonds (SGBs).-27 Live Updates: SGB, Capital Gains, STT, ITR deadline and TCS changes

The New tax regime under section 115BAC(1A) of the Income-tax Act, 1961 and section 202 of the Income-tax Act, 2025 is applicable to person, being an individual or Hindu undivided family or association of persons [other than a co-operative society], or body of individuals, whether incorporated or not, or an artificial juridical person referred to in section 2(31)(vii) of the Income-tax Act, 1961 or section 2(77)(g) of the Income-tax Act, 2025.

The disability pension received by Armed Forces personnel when invalided out of service due to injury on account of disability attributable/aggravated by service in the armed forces is exempt. In Budget 2026, it has been proposed to amend the Income-tax Act, 2025 to provide an exemption for disability pension received by members of the Armed Forces who have been invalided out of service on account of a bodily disability attributable to, or aggravated by, military, naval or air force service.

Union Budget 2026-27 has proposed to reduce the multiplicity of TCS rates. Also, certain TCS rates have been rationalised to address the cash flow issues on this account.

Sale of alcoholic liquor for human consumption

• Current rate: 1%

• Proposed rate: 2%

Sale of tendu leaves

• Current rate: 5%

• Proposed rate: 2%

Sale of scrap

• Current rate: 1%

• Proposed rate: 2%

Sale of minerals (coal, lignite or iron ore)

• Current rate: 1%

• Proposed rate: 2%

Remittances under the Liberalised Remittance Scheme (LRS) exceeding ₹10 lakh

For education or medical treatment:

• Current rate: 5%

• Proposed rate: 2%

For purposes other than education or medical treatment:

• Current rate: 20%

• Proposed rate: 20% (no change)

Sale of overseas tour programme package, including travel, hotel stay, boarding, lodging or similar expenditure

Amounts up to ₹10 lakh:

• Current rate: 5%

• Proposed: 2%

Amounts exceeding ₹10 lakh:

• Current rate: 20%

• Proposed: 2%

Union Budget 2026-27 has proposed a penalty for non-furnishing of statement or furnishing inaccurate information in a statement on transaction of crypto-assets. The penalties are to the tune of ₹200 per day for non-furnishing of statement and ₹50,000 for furnishing inaccurate particulars.

The Budget document says, "To ensure compliance to the provisions of section 509 of the Income-tax Act, 2025 and create a deterrence for non-furnishing of statement or for furnishing inaccurate information in respect of crypto assets in such statement, it is proposed to introduce penalty provision. Penalty of ₹200 per day for non-furnishing of statement and ₹50,000 for furnishing inaccurate particulars and failure to correct such inaccuracy is proposed to be levied."

Dinesh Kanabar, CEO and Chairman, Dhruva Advisors, says, “The Union Budget 2026 was widely expected to be a non-event from a tax perspective, given that the new Income-tax Act comes into force from 1 April 2026 after extensive consultations and Parliamentary scrutiny. Ordinarily, one would not expect material changes to a new law even before it becomes operational. Yet, contrary to expectations, Budget 2026 turned out to be heavily tax-oriented, introducing nearly 90 amendments to the Income-tax Act ahead of its effective date.”

"The policy thrust of Budget 2026 reflects two clear objectives: directing investment towards priority sectors such as data centres, Global Capability Centres and contract manufacturing, and reducing friction in tax compliance through lower TCS on foreign remittances, eased disclosure norms, rationalised penalties and a reduced pre-deposit for appeals. Even the increase in Securities Transaction Tax on equities can be seen as a calibrated step to curb excessive speculative activity. What is notably missing, however, are fresh incentives for domestic manufacturing and research and development,” he adds.

Finance Minister has proposed to revise provisions governing baggage clearance during international travel to address genuine concerns of passengers. She said that the revised rules will enhance duty-free allowances in line with the present day travel realities and provide clarity in temporary carriage of goods brought in or taken out.

Finance Minister Nirmala Sitharaman said, MAT is proposed to be made the final tax. "So, there will be no further credit accumulation from 1st April 2026. In line with this change, the rate of final tax is being reduced to 14 percent from the current MAT rate of 15 percent. The brought forward MAT credit of taxpayers accumulated till 31st March 2026, will continue to be available to them for set-off as above."

The FM also said, "To encourage companies to shift to the new regime, set-off of brought forward MAT credit is proposed to be allowed to companies only in the new regime. Set-off using available MAT credit is proposed to be allowed to an extent of 1/4th of the tax liability in the new regime."

Vaibhav Gupta, Partner, Dhruva Advisors, says, "Amendment in buyback taxation to treat it as capital gains as earlier is positive for retail and non-promoter shareholders. Even for promoter shareholders, it enables offsetting the cost against the buyback proceeds and the additional income tax is payable on the capital gains. An issue that is likely to arise and cause litigation going forward is offsetting capital losses against the buyback proceeds, especially in cases where there is other capital gains income in the same year. The tax officer is likely to disallow the loss offset against buyback income as it would reduce the additional income tax payable by promoters”.

In order to encourage a vast pool of global talent to work in India for a longer period of time, the Finance Minister has proposed to provide an exemption to global (non-India sourced) income of a non-resident expert, for a stay period of 5 years under notified schemes.

Further, the FM also proposed to provide exemption from Minimum Alternate Tax (MAT) to all non-residents who pay tax on presumptive basis.

The Finance Minister has proposed to allow inter-cooperative society dividend income as deduction under the new tax regime to the extent it is further distributed to its members.

She further proposed to allow exemption for a period of 3 years, to dividend income received by a notified national cooperative federation, on their investments made in companies up to 31.1.2026. This exemption would be allowed only for dividends further distributed to its member co-operatives.

"There is no penalty presently for non-disclosure of nonimmovable foreign assets with aggregate value less than 20 lakh rupees. I propose to also provide them with immunity from prosecution with retrospective effect from 1.10.2024," the Finance Minister said today.

In a move that can help boost equity capital market liquidity, the government on Sunday proposed allowing Indian non-residents to invest in domestic stocks through the portfolio investment scheme. "Individual Persons Resident Outside India (PROI) will be permitted to invest in equity instruments of listed Indian companies through the Portfolio Investment Scheme. It is also proposed to increase the investment limit for an individual PROI under this scheme from 5 per cent to 10 per cent, with an overall investment limit for all individual PROIs to 24 per cent, from the current 10 per cent," Sitharaman said. Accordiing to experts, this step can help increase inflows as well as stabilise the Indian currency.

The Finance Minister proposed following changes in tax rules to reduce tax litigations:

• There will be no interest liability on the taxpayer on the penalty amount for the period of appeal before the first appellate authority irrespective of the outcome of appeal process.

• Quantum of pre-payment is being reduced from 20% to 10% and will continue to be calculated only on the core tax demand.

• Taxpayers to be allowed to update their returns even after reassessment proceedings have been initiated, at an additional 10% tax rate over and above the rate applicable for the relevant year. The assessing officer will then use only this updated return in his proceedings.

• Penalties for certain technical defaults such as failure to get accounts audited, non-furnishing of transfer pricing audit report and default in furnishing statement for financial transactions, are proposed to be converted into fee.

• Prosecution framework under the Income Tax Act to be rationalised while maintaining a careful balance for deterrence in some serious offences.

Anuj Puri, Chairman, ANAROCK Group, says, "This Budget is capex-driven, asset-centric, and structurally pro-investment, with clear financial commitments to MSMEs, manufacturing, technology, biopharma and the green transition. REIT-led monetisation of CPSE commercial assets, long-term policy backing for data centres, focused development of temple towns, and a clear push for Tier-2 and Tier-3 commercial growth together reinforce confidence in real assets, hospitality, and urban expansion. However, the absence of any direct announcement on affordable housing - particularly around definition reset or fiscal support - is a disappointment, given its importance for urban housing supply and inclusive growth."

CA Dr Suresh Surana says, "The proposal to extend the time limit for filing revised returns and to rationalise return-filing timelines would provide taxpayers sufficient time to identify and correct inadvertent errors or omissions in their returns, thereby improving the overall accuracy of tax filings. Further, it would also allow voluntary correction of errors through revised returns and reduce litigation."

Union Budget 2026 has proposed to exempt interest awarded by Motor Accident Claims Tribunals from income tax. This will ensure accident victims receive their full compensation without erosion through TDS.

"It is proposed to amend Schedule XI to rationalise the provisions relating to recognised provident funds by deleting parity-based and percentage-based limits on employer contributions, removing salary-linked relaxations and shareholder-based distinctions, aligning eligibility for recognition with exemption under section 17 of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, and modifying investment-related provisions to remove rigid statutory caps inconsistent with prevailing EPFO norms," Budget documents say.

As per the Budget 2026 documents, interest expenses cannot be offset against any dividend income from mutual funds.

"It is proposed to provide that no deduction shall be allowed in respect of any interest expenditure incurred in relation to dividend income or income from units of mutual funds, and to omit the existing provision permitting such deduction subject to a specified ceiling," the Budget documents say.

"It is proposed to provide that the exemption from capital gains tax in respect of Sovereign Gold Bonds shall be available only where such bonds are subscribed to by an individual at the time of original issue and are held continuously until redemption on maturity," according to the Budget Speech 2026 document.

"For the ease of taxpayers holding securities in multiple companies, I propose to enable depositories to accept Form 15G or Form 15H from the investor and provide it directly to various relevant companies." FM Sitharaman said.

Form 15G and H are filed by taxpayers having income below the basic exemption limit.

The Finance Minister has announced the following on TCS rates:

Budget 2026 provides a one-time relief to small taxpayers with small investments in foreign stocks and funds. To address the 'practical issues" faced by them in disclosing their foreign investments, the FM has announced a one-time 6-month foreign asset disclosure scheme.

"To address practical issues of small taxpayers like students, young professionals, tech employees, relocated NRIs, and such others, I propose to introduce a one-time 6-month foreign asset disclosure scheme for these taxpayers to disclose income or assets below a certain size," the FM said.

For normal ITR filing by individuals with ITR 1 and ITR 2, there is no change in deadline. They can file till July 31.

The new announcements on ITR and revised ITR filing are as follows:

• Non-audit business cases or trusts will be able to file their returns till August 31.

• Revised returns can be filed till March 31 after paying a nominal fee of ₹1000 or ₹5000, if filed after December 31, depending on whether the income is below or above ₹5 lakh.

"I also propose to stagger the timeline for filing of tax returns. Individuals with ITR 1 and ITR 2 returns will continue to file till 31st July and non-audit business cases or trusts are proposed to be allowed time till 31st August," the Finance Minister said.

"Presently revised return can be filed upto 31st December following the tax year. Return filing period extends up to October 31st for persons engaged in international transactions under section 92E. In this regard, it is proposed to allow extending the time of filing revised return upto 31st March following the tax year. This revised return can be of original return or belated return. A nominal fee of ₹1000 or₹ 5000 is also proposed where the revision of original or belated return is made after 31st December depending upon whether the income is upto or more than ₹5 lakh," she said

The Finance Minister has announced a change in taxation of share-buybacks. Gains from such buybacks will now be taxed as capital gains, not as income from other sources. This decision is expected to help minority shareholders.

"Change in taxation of buyback was brought in to address the improper use of buyback route by promoters. In the interest of minority shareholders, I propose to tax buyback for all types of shareholders as Capital Gains. However, to disincentivize misuse of tax arbitrage, promoters will pay an additional buyback tax. This will make effective tax 22 percent for corporate promoters. For noncorporate promoters the effective tax will be 30 percent," Sitharaman said.

Union Budget 2026 has increased the Securities Transaction Tax (STT) rate on Futures to 0.05 from 0.02 and on options to 0.15.

Here's what she said: "I propose to raise the STT on Futures to 0.05 percent from present 0.02 percent. STT on options premium and exercise of options are both proposed to be raised to 0.15 percent from the present rate of 0.1 percent and 0.125 percent respectively," the Finance Minister said in the Budget Speech.

Finance Minister Nirmala Sitharaman said the Income Tax Act, 2025 will be implemented from April 1 and rules and tax returns forms will be notified soon. Changes made in tax laws in 2026-27 Budget will be incorporated in the new legislation. "This (direct tax code) was completed in record time and the Income Tax Act 2025 will come into effect from first April 2026. The simplified income tax rules and forms will be notified shortly, giving adequate time to taxpayers to acquaint themselves with its requirements," the FM said.

According to the Finance Minister, the income-tax forms have been redesigned, such that ordinary citizens can comply without difficulty.

The Finance Minister has announced the following on STT for futures and options:

• STT on futures hiked to 0.05% vs 0.02%

• STT on options premium hiked to 0.15%

FM proposes to tax all types of share buybacks as capital gains. (more details soon)

Finance Minister has proposed a six-month foreign asset disclosure scheme for small taxpayers like students, tech professionals and relocated NRIs.

Finance Minister says the TDS on the sale of immovable property by NRI shall be deducted by resident buyers.

FM announces a change in TCS rates for the following:

• Tax Collected at Source (TCS) rate on sale of overseas tour packages cut to 2% from 5% and 20% earlier

• New TCS rates on medical and education visits abroad

(more details soon)

FM announces an extension of filing revised returns to March 31 after paying a nominal fee.

Finance Minister Nirmala Sitharaman has announced staggered Income Tax return due dates for individuals and for those businesses in non-audit cases. The new due dates will be July 31 and July 31. More details soon