FY27 Financial Changes: New Tax Rules, PAN Updates, Salary Structure & More

Top Summary

• What happened: India implements new financial and regulatory rules starting April 1, 2026, impacting taxes, salaries, and more.
• Why it matters: These changes significantly alter financial practices and affect household budgets and compliance requirements.
• What changes: New Income Tax Act, PAN regulations, salary structure adjustments, and FASTag fee hikes take effect.
• Who is affected: Salaried individuals, taxpayers, PAN applicants, and FASTag users across India.

Income Tax Overhaul

The new financial year (FY27) brings a major shift with the introduction of the Income Tax Act, 2025, replacing the six-decade-old Income Tax Act, 1961.

The new tax regime will remain the default option. Those with significant investments may still prefer the old regime for its exemptions.

There will be no changes in income tax slabs under either the old or new income tax regimes starting April 1st, 2026.

Tax Collected at Source (TCS) Updates

Budget 2026 rationalized TCS rates for easier compliance. Here are the key changes:

• Alcoholic beverages: TCS rate increased from 1% to 2%.
• Tendu leaves: TCS rate reduced from 5% to 2%.
• Scrap: TCS rate increased from 1% to 2%.
• Minerals (coal, lignite, iron ore): TCS rate increased from 1% to 2%.
• Overseas tour packages (LRS): TCS rate reduced to a flat 2%.
• Education & medical treatment (LRS): TCS rate reduced from 5% to 2%.

ITR Filing Changes

The deadline for filing revised ITRs has been extended to 31st March of the relevant financial year, but an additional fee applies after 31st December. The belated return deadline remains unchanged.

The due date for filing ITR-3 and ITR-4 for non-audit taxpayers is extended to 31st August. This also applies to FY 2025-26.

The deadline for ITR-1 and ITR-2 remains 31st July. The tax audit due date stays at 31st October.

PAN Application Requirements

Starting April 1, 2026, PAN applicants must submit additional supporting documents. These include birth certificates, voter IDs, passports, driving licenses, and matriculation certificates.

Key changes to PAN applications include:

• Additional documents now required beyond just Aadhaar.
• The PAN name will match Aadhaar exactly. Ensure your Aadhaar details are correct.
• New PAN application forms will be introduced. Old forms will not be accepted after April 1, 2026.

Salary Structure Adjustments

Salaried employees may see a reduced take-home salary if the new labour laws are implemented from April 1st.

Companies must now pay at least 50% of your salary as the basic wage component. This will increase provident fund contributions, lowering in-hand salary.

 

Under the new codes, the provident fund contribution is required to be a proportion of 50% of gross pay.

 

The requirement for employees to have worked a minimum of 240 days to ask for leave has been reduced to 180 days.

FASTag Fee Hike

The FASTag annual pass fee increases by ₹75, bringing the total to ₹3,075 from ₹3,000. This applies to non-commercial vehicles such as cars, vans, and jeeps.

You can recharge via the Rajmarg Yatra App or the official NHAI website. The pass activates within two hours of payment.

Recharge your FASTag before April 1st to avoid the increased fee.

FASTag passes are usable across approximately 1,150 fee plazas on National Highways and Expressways nationwide.

ATM Cash Withdrawal Changes

Banks are implementing changes to ATM cash withdrawal limits. HDFC Bank, for example, will charge ₹23 per transaction on UPI cash withdrawals after five free transactions.

RBI's Sachet Portal

The RBI's Sachet Portal helps users verify financial institutions and report fraud. This platform aids in preventing financial scams and protecting investors.

Victims can report fraud or unauthorized investment schemes and track their complaints.

What to Watch Next

Monitor updates from the government and financial institutions regarding the implementation of these changes. Pay close attention to any further notifications or clarifications related to the new Income Tax Act and labor laws to ensure compliance and adjust your financial planning accordingly.