Govt notifies Finance Act 2026: New income tax rules, surcharge changes come into effect from April 1

The government has notified the Finance Act 2026, bringing into force the tax changes approved under the Union Budget for 2026-27, according to a gazette notification issued by the Ministry of Law and Justice.“The following Act of Parliament received the assent of the President on March 30, 2026 and is hereby published for general information,” the notification said.The Act gives legal effect to the Centre’s financial proposals for the upcoming fiscal year beginning April 1.Parliament had cleared the Finance Bill 2026 last week, with the Rajya Sabha returning it to the Lok Sabha by a voice vote after a brief discussion. The Lok Sabha had earlier passed the bill on March 25 along with 32 amendments, with Finance Minister Nirmala Sitharaman responding to members’ queries.Also Read: Your income tax changes from April 1, 2026! Top 10 things salaried taxpayers should know about new rules & tax regime choiceUnder the Budget 2026-27, total expenditure is pegged at Rs 53.47 lakh crore, marking a 7.7 per cent increase over the current fiscal ending March 31. Capital expenditure has been set at Rs 12.2 lakh crore.The government has projected gross tax revenues at Rs 44.04 lakh crore and gross borrowing at Rs 17.2 lakh crore, with the fiscal deficit estimated at 4.3 per cent of GDP for FY27, lower than 4.4 per cent in the current fiscal.Also Read: ITR filing AY 2026-27: Income Tax Return forms ITR-1 to ITR-7 notified; key changes, eligibility explainedAmong key tax changes, the Act introduces a flat 12 per cent surcharge on capital gains earned by individual and corporate shareholders from company share buybacks, effective April 1.The move is expected to increase the effective tax burden on such gains, replacing the earlier slab-based surcharge structure. At present, no surcharge is levied on taxable income up to Rs 50 lakh, while income between Rs 50 lakh and Rs 1 crore attracts a 10 per cent surcharge on capital gains from buybacks