The Ministry of Law and Justice (Legislative Department), on March 30, 2026, notified the Finance Act, 2026 after receiving Presidential assent, to give effect to the financial proposals of the Central Government for the financial year 2026–27. The Act provides that most provisions (Sections 2 to 129, part of Section 152 and Section 156) shall come into force from April 1, 2026, while certain provisions will be notified separately.
The Act prescribes income-tax rates for Assessment Year 2026–27 under the Income-tax Act, 1961, including slab-wise tax rates, surcharge structures for different categories of taxpayers, and computation provisions where agricultural income is considered for rate purposes. It also details tax treatment under special provisions such as sections 115BAC, 115BAA, 115BAB, 115BAD, MAT (section 115JB), and AMT (section 115JC), along with formulas for calculating tax and surcharge in specified scenarios.
Further, the Act mandates levy of Health and Education Cess at 4% on income-tax plus surcharge and lays down definitions such as “domestic company” and “net agricultural income.” The provisions operate within the broader taxation framework, ensuring applicability of various chapters of the Income-tax Act, including those relating to special tax regimes, surcharge applicability, and computation mechanisms.
[Notification No. 4 of 2026]
