From UPI to ATM, India to have these new banking rules from today

The dawn of April 2026 marks a historic pivot for the Indian economy as the government rolls out a comprehensive suite of financial and structural reforms. Central to this transition is the retirement of the long-standing Income-tax Act of 1961, replaced by a modernised framework designed to align with contemporary digital and global standards.

While the fundamental tax brackets remain consistent, the underlying mechanisms for reporting and compliance are undergoing a radical shift to foster transparency and ease the burden on honest taxpayers.

The debut of the new income tax act

From April 1, 2026, the six-decade-old Income-tax Act, 1961, is scheduled to be replaced by the Income-tax Act, 2025. This legislative update aims to simplify the calculation of liabilities for individuals and corporations alike.

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A significant administrative change is the introduction of a unified tax year, which eliminates the confusing distinction between a financial year and an assessment year. Consequently, all income generated from this date will be tracked under a single period. It is important to note that all ongoing assessments, appeals, and proceedings under the old Act are expected to continue until fully resolved.

Tighter scrutiny on HRA and PAN applications

Claiming exemptions for house rent allowance will now require more rigorous documentation to prevent leakage. Employees must provide their landlord’s PAN and concrete evidence of rent transfers. Furthermore, the 50% exemption benefit for metro dwellers has been extended to include cities like Bengaluru, Pune, and Ahmedabad.

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On the identification front, the process for obtaining a PAN is becoming more specific. Aadhaar-only applications are being phased out in favour of category-specific forms (Form 93 to 96) for different entities. PAN will also be mandatory for significant financial movements, such as depositing over ₹10 lakh in cash or purchasing property valued above ₹20 lakh.

Shifts in investments and market levies

The investment landscape faces notable adjustments, particularly regarding share buybacks, which will now be taxed as capital gains. Additionally, traders in the equity derivatives market will see an increase in STT, with rates rising for both futures and options.

For those invested in Sovereign Gold Bonds, the tax-free status on redemption is now restricted to original issues only, leaving secondary market purchases liable for capital gains tax.

Banking, credit cards and digital security

Financial institutions are updating their protocols to enhance security and adjust fee structures. The RBI is mandating two-factor authentication for digital payments, requiring a dynamic element like biometrics or OTPs to curb fraud. Major banks are also revising their credit card rewards and ATM fees.

For instance, high-value credit card settlements will be closely monitored by tax authorities. Meanwhile, HDFC Bank will count UPI-based cardless withdrawals towards your monthly free limit, charging extra once that threshold is crossed.

Labour reforms and railway policies

Workers may see a shift in their monthly earnings due to new labour laws that prioritise long-term benefits. By increasing the proportion of basic pay and dearness allowance, the government aims to boost gratuity and retirement funds, though this might lead to a slight dip in immediate take-home pay.

On the travel front, Indian Railways is implementing stricter refund rules. Travellers must now be certain of their plans, as cancellations made within eight hours of departure will likely result in no refund at all.

Compliance deadlines for taxpayers

To accommodate the transition, the authorities have provided specific timelines for filing returns. Salaried individuals have until July 31, 2026, while businesses not requiring audits have an extended window until August 31. Those subject to audits must complete their filings by October 31, ensuring everyone has ample time to adapt to the new legal landscape.