Income Tax Act 2025 vs. 1961 Act: Top 10 Changes for Indian Taxpayers

 

SECTION 1  |  THE NEW INCOME TAX ACT, 2025 — WHAT CHANGED?

India's income tax law has been overhauled for the first time in over 60 years. The Income Tax Act, 2025 (ITA 2025) replaces the Income Tax Act, 1961 with effect from 1 April 2026. The new law does not change tax rates or deductions — it restructures, simplifies, and modernises the legal framework.

 

1.1  At a Glance — Old Act vs. New Act

Parameter	Income Tax Act, 1961	Income Tax Act, 2025
Sections	819 Sections	536 Sections
Chapters	47 Chapters	23 Chapters
Rules	500+ Rules (IT Rules, 1962)	333 Rules (IT Rules, 2026)
Time Period Concept	Previous Year + Assessment Year	Single Tax Year
Applicable From	Income earned from 1 April 1962	Income earned from 1 April 2026
Language	Legal/complex	Plain, simplified
Digital Focus	Limited	Comprehensive

 

1.2  The Single 'Tax Year' — End of the AY vs FY Confusion

One of the most impactful changes for all taxpayers is the replacement of 'Previous Year' and 'Assessment Year' with a single unified concept: Tax Year.

 

Under Old Law (1961)	Under New Law (2025)
Income earned in FY 2026-27 (Previous Year) was assessed in AY 2027-28	Income earned in Tax Year 2026-27 is filed and assessed within Tax Year 2026-27
Form 16 showed Assessment Year 2027-28	Form 16 will show Tax Year 2026-27
Losses carried for 8 Assessment Years	Losses carried for 8 Tax Years

 

Note: Income earned in FY 2025-26 is still governed by the Income Tax Act, 1961 and assessed in AY 2026-27. The Income Tax Act, 2025 applies only to income earned from 1 April 2026 onwards (Tax Year 2026-27).

 

1.3  Transition Safeguards

•  All pending assessments, refunds, and appeals for periods before 1 April 2026 will be completed under the old Act (Section 536 — Repeal and Savings).

•  All approvals, registrations, and exemptions (80G, 12A, DPIIT, etc.) granted under the old Act remain valid under the new Act.

•  Rights, benefits, and liabilities arising under the old Act are fully protected.

•  PAN, TAN, faceless proceedings, and all existing administrative infrastructure continue seamlessly.

 

SECTION 2  |  TAX SLABS & RATES — TAX YEAR 2026–27

The tax slab structure announced in Budget 2025 continues unchanged for Tax Year 2026-27. The New Tax Regime remains the default. Taxpayers may opt for the Old Tax Regime if more beneficial.

 

2.1  New Tax Regime (Default) — Section 202, ITA 2025

Taxable Income (Rs.)	Tax Rate	Approx. Tax on Slab
Up to Rs. 4,00,000	NIL	Nil
Rs. 4,00,001 to Rs. 8,00,000	5%	Rs. 20,000
Rs. 8,00,001 to Rs. 12,00,000	10%	Rs. 40,000
Rs. 12,00,001 to Rs. 16,00,000	15%	Rs. 60,000
Rs. 16,00,001 to Rs. 20,00,000	20%	Rs. 80,000
Rs. 20,00,001 to Rs. 24,00,000	25%	Rs. 1,00,000
Above Rs. 24,00,000	30%	On balance

 

Note: Rebate under Section 87A: A full rebate of Rs. 60,000 is available to resident individuals with taxable income up to Rs. 12,00,000, making the effective tax liability NIL. For salaried individuals, after the Rs. 75,000 standard deduction, gross salary up to Rs. 12,75,000 is effectively tax-free. Rebate does not apply to special-rate income (capital gains, winnings, etc.).

 

2.2  Old Tax Regime (Optional) — Individual Below 60 Years

Taxable Income (Rs.)	Tax Rate	Cumulative Tax
Up to Rs. 2,50,000	NIL	Nil
Rs. 2,50,001 to Rs. 5,00,000	5%	Rs. 12,500
Rs. 5,00,001 to Rs. 10,00,000	20%	Rs. 1,12,500
Above Rs. 10,00,000	30%	On balance + Rs. 1,12,500

 

Senior Citizens (60–80 years) basic exemption: Rs. 3,00,000 | Super Senior Citizens (80+ years) basic exemption: Rs. 5,00,000

Rebate under Section 87A (Old Regime): Rs. 12,500 for income up to Rs. 5,00,000.

 

2.3  Surcharge and Cess

Income Range	Surcharge (New Regime)	Surcharge (Old Regime)
Up to Rs. 50 Lakh	NIL	NIL
Rs. 50 Lakh to Rs. 1 Crore	10%	10%
Rs. 1 Crore to Rs. 2 Crore	15%	15%
Rs. 2 Crore to Rs. 5 Crore	25% (Max)	25%
Above Rs. 5 Crore	25% (Capped)	37%

 

Health and Education Cess @ 4% applies on (Tax + Surcharge) under both regimes.

 

2.4  Quick Tax Computation Examples

Gross Salary (Rs.)	New Regime Tax*	Old Regime Tax*	Saving in New Regime	Better Regime
10,00,000	NIL	~72,500	~72,500	New
12,75,000	NIL (Rebate)	~1,23,500	~1,23,500	New
15,00,000	~1,54,700	~1,87,500 (No deductions)	~32,800	New
20,00,000	~2,99,000	~3,37,500 (No deductions)	~38,500	Context-dependent
50,00,000	~11,48,000	~13,95,000 (No deductions)	~2,47,000	Context-dependent

 

*Approximate figures inclusive of 4% cess, before surcharge. Old regime figures assume no deductions for comparison. Actual tax will vary based on deductions claimed.

 

SECTION 3  |  KEY DEDUCTIONS & EXEMPTIONS

3.1  Deductions Under the New Tax Regime (What is Still Allowed)

The New Tax Regime offers very few deductions. The ones permitted are listed below:

 

Deduction / Benefit	Limit (Rs.)	Remarks
Standard Deduction (Salary/Pension)	75,000	Flat deduction — no documentation required
Employer's NPS Contribution (Sec 80CCD(2))	10% of salary (Govt: 14%)	Most valuable deduction in new regime
Family Pension Deduction	Lower of 1/3rd or Rs. 25,000	For family pension recipients
Agniveer Corpus Fund (Sec 80CCH)	Full contribution	Applicable to Agniveer scheme employees
Interest on Home Loan (Let-out property)	Actual interest (no cap)	Only for let-out/deemed let-out property
Meal Vouchers / Coupons (NEW)	Rs. 200 per meal per day	Enhanced from earlier limit — employer perk
Gratuity, Leave Encashment, VRS	Prescribed limits	Exempt retirement benefits continue

 

3.2  Deductions Under the Old Tax Regime (Key Sections)

Section	Nature of Deduction	Limit (Rs.)	Key Investments / Expenses
80C	Life / PPF / ELSS / FD / Tuition Fees	1,50,000	PPF, ELSS, LIP, NSC, 5-yr FD, tuition fees
80CCD(1B)	Additional NPS Contribution	50,000	Over and above 80C — invest in NPS Tier-I
80D	Health Insurance Premium	25,000 / 50,000 (SC)	Self, family, parents. Senior citizen limit: Rs. 50,000
80E	Interest on Education Loan	Actual (8 years)	For higher education — no upper cap
80EEA	Affordable Housing Loan Interest	1,50,000	Subject to conditions (stamp value up to Rs. 45L)
80G	Donations to Eligible Trusts/Funds	50% or 100% of donation	PM Relief Fund, NGOs — conditions apply
80TTA	Interest on Savings Account	10,000	Not for senior citizens (80TTB applies)
80TTB	Interest income — Senior Citizens	1,00,000 (NEW — doubled)	All interest income (FD, savings, post office) — enhanced from Rs. 50,000
24(b)	Home Loan Interest (Self-occupied)	2,00,000	Additional 1,50,000 under 80EEA for first-time buyers
HRA	House Rent Allowance	Per formula	50% HRA exemption now extended to 8 cities (see Sec 3.3)

 

3.3  HRA Exemption — New Rules (IT Rules, 2026)

The Income Tax Rules, 2026 have significantly expanded the 50% HRA exemption to cover more cities. The HRA exemption is the lower of:

•  Actual HRA received from employer

•  Actual rent paid minus 10% of salary (basic + DA)

•  50% of salary for residents in the specified 8 metro cities / 40% for others

 

Cities with 50% HRA Exemption (from 1 April 2026)	All Other Cities
Mumbai, Delhi, Kolkata, Chennai, Bengaluru (NEW), Pune (NEW), Hyderabad (NEW), Ahmedabad (NEW)	40% HRA exemption applicable (unchanged)

 

Action Required: New Compliance: From 1 April 2026, taxpayers claiming HRA must disclose their relationship with the landlord in the ITR. Landlord PAN is mandatory where annual rent exceeds Rs. 1,00,000. This is to curb fraudulent HRA claims.

 

SECTION 4  |  CAPITAL GAINS TAXATION — TAX YEAR 2026–27

Capital gains tax rates are unchanged from those applicable in FY 2025-26. However, significant changes have been introduced regarding buyback taxation and Sovereign Gold Bond treatment.

 

4.1  Capital Gains — Rates at a Glance

Asset Type	STCG Rate	LTCG Rate	Holding Period for LTCG
Listed Equity Shares / Equity MF	20%	12.5%*	More than 12 months
Unlisted Shares	Slab Rates	12.5%	More than 24 months
Immovable Property (Land/Building)	Slab Rates	12.5% (No indexation)**	More than 24 months
Debt Mutual Funds / Bonds	Slab Rates	Slab Rates	Always at slab rates (post March 2023 units)
Gold / Silver / Jewellery	Slab Rates	12.5% (No indexation)	More than 24 months
Sovereign Gold Bonds (SGB) — Original Allotment	N/A	EXEMPT	Redemption by original allottee — full exemption
SGB — Secondary Market Purchase (NEW)	Slab Rates	12.5%	More than 12 months — Exemption not available

 

*LTCG on listed equity and equity MF is exempt up to Rs. 1,25,000 per annum. Gains above this threshold are taxed at 12.5% without indexation.

**For immovable property acquired before 23 July 2024, the taxpayer retains the option to compute capital gains with indexation at 20% LTCG rate or without indexation at 12.5% (whichever is lower).

 

4.2  Share Buyback Taxation — Major Change from 1 April 2026

This is one of the most impactful structural changes for corporate investors. Share buyback proceeds are now taxed as Capital Gains — not dividend income.

 

Category	Old Treatment (up to 31 Mar 2026)	New Treatment (from 1 Apr 2026)
Retail / Non-Promoter Shareholders	Taxed as deemed dividend — taxed in hands of company	Taxed as Capital Gains in investor's hands — LTCG at 12.5% if held 12+ months
Corporate Promoters	Taxed as deemed dividend	Capital gains PLUS additional buyback tax — effective rate: ~22%
Non-Corporate Promoters	Taxed as deemed dividend	Capital gains PLUS additional buyback tax — effective rate: ~30%

 

Note: Action Point: Retail investors who receive buyback proceeds for shares held over 12 months will benefit from the 12.5% LTCG rate (above the Rs. 1.25L annual exemption). The acquisition cost of bought-back shares will be available as a deduction for cost computation.

 

4.3  Securities Transaction Tax (STT) — Revised Rates for F&O Traders

Transaction Type	Old STT Rate	New STT Rate (w.e.f. 1 Apr 2026)
Futures (Sale)	0.02%	0.05%  (2.5x increase)
Options (Sale — premium)	0.1%	Revised upward
Equity Delivery (Purchase/Sale)	0.1% each side	Unchanged

 

Action Required: F&O Traders: The higher STT directly increases your cost of trading. F&O income continues to be taxed at slab rates as business income. This change significantly impacts high-volume derivative traders. Factor in the revised STT in your trading cost analysis.

 

SECTION 5  |  ITR FILING — DEADLINES, FORMS & NEW RULES

5.1  ITR Filing Deadlines — Tax Year 2026–27 (Income Earned 1 Apr 2026 to 31 Mar 2027)

ITR Form	Who Should File	Due Date	Remarks
ITR-1 (Sahaj)	Resident salaried, one/two house properties, income up to Rs. 50L	31 July 2027	ITR-1 now covers 2 house properties (new)
ITR-2	Individuals/HUF — capital gains, foreign assets, multiple properties	31 July 2027	No business income
ITR-3	Individuals/HUF with business/profession income (non-audit)	31 August 2027 (NEW)	Extended by 1 month
ITR-4 (Sugam)	Presumptive income — Sec 44AD / 44ADA / 44AE (non-audit)	31 August 2027 (NEW)	Extended by 1 month
ITR-5	LLPs, Firms, AOPs, BOIs (non-audit)	31 August 2027 (NEW)	Firms without audit
Audit Cases (All forms)	Entities requiring tax/statutory audit under Sec 44AB / Companies Act	31 October 2027	Unchanged
Transfer Pricing	International transactions	30 November 2027	Unchanged
Belated Return	Returns filed after due date	31 December 2027	Late fee u/s 234F — Rs. 1,000 / Rs. 5,000
Revised Return	Correcting errors in original return	31 March 2028 (NEW)	Extended to end of Tax Year — late fee applies post December

 

Note: Key Transition: For FY 2025-26 (AY 2026-27), returns are filed under the old Income Tax Act, 1961. The first return under the new Income Tax Act, 2025 (Tax Year 2026-27) will be due from July 2027.

 

5.2  Updated Return (ITR-U) — Deadlines

Period	Updated Return Deadline	Additional Tax Payable
FY 2021-22 (AY 2022-23)	Not eligible from 1 Apr 2026	Window has closed
FY 2022-23 (AY 2023-24)	31 March 2027	25% on tax + interest
FY 2023-24 (AY 2024-25)	31 March 2028	25% on tax + interest
FY 2024-25 (AY 2025-26)	31 March 2029	25% or 50% based on timing

 

5.3  TDS — Streamlined Single Declaration

Under the new Income Tax Act, 2025, taxpayers can now submit a single declaration to avoid TDS across multiple income streams from the same payer. This eliminates the need to submit separate Form 15G / 15H declarations to each paying branch of a bank or institution.

 

Nature of Income	TDS Threshold (Pre-2026)	TDS Threshold (From 1 Apr 2026)
Interest (Senior Citizens — Banks etc.)	Rs. 50,000	Rs. 1,00,000 (DOUBLED)
Rental Income	Rs. 2,40,000 p.a.	Rs. 6,00,000 p.a. (2.5x)
Dividends	Rs. 5,000	Rs. 10,000
Professional/Technical Fees	Rs. 30,000	Rs. 50,000
NRI Property Purchase (TDS by buyer)	Required TAN registration	PAN-based challan — NO TAN needed

 

SECTION 6  |  TCS — TAX COLLECTED AT SOURCE — REVISED RATES

Tax Collected at Source (TCS) rates have been rationalised with effect from 1 April 2026 to ease compliance, reduce refund delays, and simplify foreign remittances.

 

6.1  TCS on Foreign Remittances (Liberalised Remittance Scheme — LRS)

Purpose of Remittance	Threshold	Old Rate	New Rate
Education / Medical Treatment abroad	Above Rs. 10 Lakh	5%	2%
Foreign Tour Packages	Any amount	5%	2%
Other Remittances (investments, gifts etc.)	Above Rs. 10 Lakh	20%	20% (unchanged)

 

Note: LRS threshold for TCS has been raised from Rs. 7 Lakh to Rs. 10 Lakh. Remittances up to Rs. 10 Lakh for education and medical purposes do not attract any TCS.

 

6.2  TCS on Sale of Goods — Rationalised Rates

Category	Old Rate	New Rate	Effective From
Scrap / Waste materials	1%	2%	1 Apr 2026
Minerals (coal, lignite, iron ore)	1%	2%	1 Apr 2026
Alcoholic Liquor for human consumption	1%	2%	1 Apr 2026
Tendu Leaves	5%	2%	1 Apr 2026
Overseas tour packages (travel agent)	5%	2%	1 Apr 2026

 

SECTION 7  |  CORPORATE TAX — KEY CHANGES

7.1  Corporate Tax Rates — FY 2026-27

Category	Base Tax Rate	Surcharge	Effective Rate
Domestic Companies (Sec 115BA — New Regime)	22%	10% (income > 1 Cr)	~25.17%
New Manufacturing Companies (Sec 115BAB)	15%	10%	~17.01%
Domestic Companies (Old Regime — turnover > Rs. 400 Cr)	30%	12% (>10 Cr)	~34.94%
Domestic Companies (Old Regime — turnover ≤ Rs. 400 Cr)	25%	7% (>1 Cr)	~29.12%
Foreign Companies	35%	2%/5%	~41.6%

 

Note: Health and Education Cess @ 4% applies on (Tax + Surcharge) for all entities.

 

7.2  Minimum Alternate Tax (MAT) — Key Changes from 1 April 2026

MAT has been restructured significantly as part of the transition to the new corporate tax regime:

 

Old Position (Up to 31 Mar 2026)	New Position (From 1 Apr 2026)
MAT rate: 15% of Book Profit	MAT rate reduced to 14% of Book Profit
Companies could accumulate MAT credit indefinitely	NO new MAT credit accumulation after 1 April 2026 — MAT becomes a final tax
MAT credit could offset regular tax liability fully	Existing MAT credit (up to 31 Mar 2026) can be utilised at 1/4th of tax liability per year under new regime

 

Action Required: Companies with large accumulated MAT credit should evaluate the utilisation strategy immediately. From 1 April 2026, no fresh MAT credit will accrue. Existing credits must be used under the new regime at 1/4th per year. Please contact us for a MAT credit utilisation analysis.

 

7.3  Tax Treatment of Dividends — Change for Investors

•  Dividend income is taxable in the hands of the recipient at applicable slab rates under both old and new regimes.

•  From 1 April 2026: The deduction for interest expenses against dividend income is no longer available. Previously, up to 20% of dividend income could be set off against interest on borrowings used to acquire dividend-yielding shares.

•  Impact: Investors who have borrowed to purchase dividend-yielding shares will face a higher taxable income from dividends effective Tax Year 2026-27.

 

SECTION 8  |  COMPLIANCE CALENDAR — KEY DATES FOR TAX YEAR 2026–27

The following calendar covers critical compliance dates applicable for Tax Year 2026-27 (April 2026 – March 2027). Please mark these dates and ensure timely action.

 

8.1  Income Tax — Direct Tax Compliance

Due Date	Compliance	Who	Penalty for Miss
15 June 2026	Advance Tax — 1st Instalment (15% of estimated tax)	All Assessees	Interest u/s 234B/C
31 July 2026	ITR Filing — ITR-1 and ITR-2 (FY 2025-26 / AY 2026-27)	Individuals/HUF	Rs. 5,000 late fee (Sec 234F)
31 August 2026	ITR Filing — ITR-3, ITR-4 non-audit (FY 2025-26)	Business/Profession	Rs. 5,000 late fee
15 September 2026	Advance Tax — 2nd Instalment (45% cumulative)	All Assessees	Interest u/s 234B/C
31 October 2026	ITR Filing — Audit cases (Tax Audit u/s 44AB)	Audit cases	Rs. 5,000 + Penalty
31 October 2026	Tax Audit Report — Form 3CA / 3CB / 3CD submission	Turnover > threshold	0.5% of turnover or Rs. 1.5L
15 December 2026	Advance Tax — 3rd Instalment (75% cumulative)	All Assessees	Interest u/s 234B/C
31 December 2026	Belated / Revised ITR without additional charge (FY 2025-26)	All Filers	Additional charge applies post Dec
30 November 2026	Transfer Pricing Report (Form 3CEB)	International transactions	Penalty u/s 271BA
15 March 2027	Advance Tax — 4th Instalment (100% cumulative)	All Assessees	Interest u/s 234B/C
31 March 2027	Last date for tax-saving investments under old regime (FY 2026-27)	Old regime taxpayers	Opportunity lost

 

8.2  TDS — Quarterly Compliance Calendar

Quarter	TDS Deduction Period	TDS Payment Due	TDS Return Due
Q1 — Apr to Jun 2026	April – June 2026	7th of following month (last month: 30 Apr for Mar TDS)	31 July 2026
Q2 — Jul to Sep 2026	July – September 2026	7th of following month	31 Oct 2026
Q3 — Oct to Dec 2026	October – December 2026	7th of following month	31 Jan 2027
Q4 — Jan to Mar 2027	January – March 2027	30 April 2027 (March TDS)	31 May 2027

 

Action Required: Late TDS Payment: Interest @ 1.5% per month applies on late payment of TDS. Late filing of TDS returns attracts Rs. 200 per day under Section 234E plus penalties. Ensure TDS is deducted, deposited, and returns filed on time.

 

SECTION 9  |  OLD REGIME vs NEW REGIME — WHICH IS BETTER FOR YOU?

Choosing the right tax regime is one of the most important financial decisions for Tax Year 2026-27. Here is a structured guide to help you decide.

 

9.1  The Break-Even Deduction Test

The New Tax Regime is better unless your total deductions (80C, HRA, home loan, 80D, etc.) exceed the 'break-even deduction' at your income level. At and above these levels of deductions, the Old Regime is more beneficial:

 

Gross Annual Income	Break-even Deduction Level	Recommendation if deductions BELOW break-even
Up to Rs. 12 Lakh	Any amount	New Regime (Zero tax after rebate)
Rs. 12 Lakh to Rs. 15 Lakh	~Rs. 2.50 Lakh	New Regime
Rs. 15 Lakh	~Rs. 3.75 Lakh	New Regime (if below)
Rs. 20 Lakh	~Rs. 5.50 Lakh	Compute both to decide
Rs. 30 Lakh and above	~Rs. 8.00 Lakh+	Old Regime may be better if high deductions

 

9.2  Decision Matrix — Quick Guide

Choose NEW Tax Regime if...	Consider OLD Tax Regime if...
Gross salary is below Rs. 12.75 lakh (zero tax after standard deduction and rebate)	You have a home loan with interest above Rs. 2 lakh (self-occupied) and salary above Rs. 15L
You do not invest in 80C / ELSS / PPF actively	You make maximum 80C investments of Rs. 1.5L + NPS Rs. 50K + 80D Rs. 25-50K
You prefer simplicity and low compliance effort	You live in a rented house with high HRA component in your salary
You are a senior citizen with limited deductions to claim	You are a senior citizen with significant FD interest AND large 80D expenditure
Your employer contributes generously to NPS under Sec 80CCD(2)	You have multiple deductions that collectively exceed the break-even threshold

 

Note: Important: Non-business taxpayers (salaried, HUF) may switch between Old and New Regime every year while filing their ITR. Business taxpayers who opt out of the new regime can switch back only once. Ensure you evaluate both regimes before the due date of filing.

 

SECTION 10  |  SENIOR CITIZENS — SPECIAL BENEFITS & PLANNING

The Income Tax Act, 2025 continues and in some areas enhances the tax benefits available to senior citizens. This section is a comprehensive guide for clients aged 60 and above.

 

10.1  Age-Based Benefits Summary

Benefit / Exemption	Senior Citizen (60–80 Years)	Super Senior Citizen (80+ Years)
Basic Exemption Limit (Old Regime)	Rs. 3,00,000	Rs. 5,00,000
TDS on Bank Interest (Sec 194A)	Rs. 1,00,000 (ENHANCED)	Rs. 1,00,000 (ENHANCED)
Deduction u/s 80TTB (All Interest)	Rs. 1,00,000	Rs. 1,00,000
Health Insurance Premium u/s 80D	Rs. 50,000	Rs. 50,000
Advance Tax — Exemption	Exempt if no business income	Exempt if no business income
ITR Filing — Section 194P (Age 75+)	N/A	Exemption from ITR if only pension + interest income from specified bank
Standard Deduction (New Regime)	Rs. 75,000	Rs. 75,000

 

Note: Section 194P: Senior citizens aged 75 or above who have pension income and interest income from the same specified bank are exempt from filing ITR. The bank deducts tax after applying eligible deductions and credits. This is a major compliance simplification.

 

SECTION 11  |  GST QUICK REFERENCE — FY 2026–27

11.1  GST Return Filing Calendar

Return	Who Files	Due Date	Frequency
GSTR-1	Outward supply details (Regular taxpayers)	11th of next month	Monthly
GSTR-1 (Quarterly — QRMP)	Taxpayers with turnover ≤ Rs. 5 Crore (opt-in)	13th of month after quarter	Quarterly
GSTR-3B	Summary return with tax payment	20th of next month	Monthly
GSTR-9	Annual Return — Regular taxpayers (turnover > Rs. 2 Cr)	31 December 2026	Annual
GSTR-9C	Reconciliation Statement (turnover > Rs. 5 Cr)	31 December 2026	Annual
GSTR-4	Composition Scheme Annual Return	30 April 2027	Annual
LUT (Export / SEZ)	Zero-rated supply without payment of tax	1 April 2026 (start of FY)	Annual renewal

 

11.2  GST Registration Thresholds

Category	Threshold for Registration	Remarks
Goods (Regular States)	Rs. 40 Lakh	Annual aggregate turnover
Services	Rs. 20 Lakh	Annual aggregate turnover
Special Category States (NE States, Himachal, Uttarakhand)	Rs. 10 Lakh	Both goods and services
Composition Scheme (Goods)	Up to Rs. 1.5 Crore	Tax rate: 1% of turnover — limited ITC
Composition Scheme (Services/Mixed)	Up to Rs. 50 Lakh	Tax rate: 6% — service providers

 

Note: GST Exempt Sectors (FY 2026-27): Individual health and life insurance products have been exempted from GST to stimulate demand and simplify compliance. Verify latest CBIC notifications for exact product coverage.

 

SECTION 12  |  YOUR 10-POINT ACTION PLAN FOR TAX YEAR 2026–27

To help you navigate the new tax year effectively, our firm has prepared the following action plan. We recommend you review each point and contact us for personalised guidance.

 

#	Action Item	Who is Affected
01	Evaluate Old vs New Tax Regime before filing ITR for FY 2025-26 (due 31 July / 31 Aug 2026). The default is New Regime — act before the deadline to opt for Old Regime.	All individual taxpayers
02	Update your HRA documentation with landlord relationship disclosure and PAN, if rent exceeds Rs. 1 lakh annually.	Salaried taxpayers in rented accommodation
03	Maximise employer NPS contribution (Sec 80CCD(2)) — it is deductible in the new regime. Speak to your HR department.	Salaried employees in new regime
04	If you hold SGBs purchased from secondary markets, factor in capital gains tax on redemption — the exemption is no longer available.	SGB investors
05	File updated ITRs (ITR-U) for FY 2021-22 immediately — the window closes on 1 April 2026. For FY 2022-23, deadline is 31 March 2027.	Taxpayers with disclosed/undisclosed income
06	Companies should assess MAT credit balance. From 1 April 2026, no fresh MAT credit accrues. Develop a utilisation roadmap.	All companies under MAT provisions
07	Review TDS deduction thresholds — several have been enhanced. Update TDS deduction systems to avoid excess deductions and unnecessary refund cycles.	All TDS deductors
08	F&O traders: Factor in higher STT on futures (0.05% from 0.02%). Reassess trading cost structures and profitability thresholds.	Derivatives / F&O traders
09	Renew LUT for GST zero-rated supplies (exports and SEZ) for FY 2026-27 at the beginning of April 2026.	Exporters and SEZ-supplying businesses
10	Plan advance tax payments. 1st instalment (15%) is due 15 June 2026. Non-residents and salaried taxpayers should monitor TDS against total tax liability.	Business owners, freelancers, investors

 

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Disclaimer: This document is a general professional knowledge resource prepared on the basis of the Income Tax Act, 2025, Income Tax Rules, 2026, and Budget 2026 provisions as known on the date of publication. It does not constitute a final legal or tax opinion. Tax positions depend on individual facts and circumstances. Due dates are subject to extensions issued by CBDT, CBIC, and MCA. The Principal recommends that final tax decisions be preceded by a review of specific facts and consultation with our office.