India

Revamp of the Indian Income-tax Law

The erstwhile Indian Income-tax law (Income-tax Act, 1961) has been completely revamped to a streamlined, simplified and modern version (Income-tax Act, 2025 [New Act]) aimed at reducing the compliance burden through consolidated provisions and clearer definitions. It completely replaces the old law, which had become increasingly complex over six decades due to numerous amendments, provisos and explanations.

The New Act is designed to present the existing tax policy in a more logical, accessible and reader‑friendly manner, without imposing any new tax. Its core objectives are to simplify statutory language, improve structural clarity, reduce interpretational disputes, align drafting with modern legislative standards and enhance voluntary compliance. Overall, the reform seeks to make India’s tax law more predictable, transparent and easier to comply with, thereby promoting a taxpayer‑centric regime and ease of doing business. The new law would be applicable to tax years starting from 1 April 2026. Any changes made in the new law have been duly incorporated in the below tax summary.

An additional tax is payable on transactions involving buyback of shares by Indian companies from its shareholders. For buyback of shares and other specified securities undertaken till 31 March 2026, consideration received under buyback was to be taxed as deemed dividend in the hands of the shareholders. However, for buyback of shares undertaken on or after 1 April 2026, the difference of consideration received on buyback and the issue price shall be chargeable to tax under the head ‘capital gains’ instead of being taxed as dividend income.

See the Capital gains taxes section for more information.

Due Date for Tax returns

In cases where the individual having income from profits and gains of business or profession and whose books of accounts are not required to be audited under any law in India, the due date to file the return is changed to 31 August of the year immediately following the relevant year in which the income is earned.

⁠Additionally, now a revised return can be filed by 31 March of the year immediately following the relevant year in which the income is earned.

See the Tax returns section for more information.

The Foreign Assets of Small Taxpayers Disclosure Scheme, 2026 (FAST‑DS 2026)

The Indian Union Budget 2026 introduced the FAST‑DS 2026, which is a one‑time, six‑month voluntary disclosure window that lets small taxpayers regularise certain past non‑disclosures of foreign assets and foreign‑sourced income, on payment of a fixed tax/ fee, with immunity from the harsh Black Money Act consequences on those specific items. The FAST-DS 2026 is open to individuals who were resident in India in the year when the foreign income was taxable in India or the foreign asset was acquired.

General Anti Avoidance Rule (GAAR)

On 31 March 2026, India’s Central Board of Direct Taxes (CBDT) has clarified the applicability of GAAR concerning investments made before 1 April 2017. Specifically, it provides that any income arising from the transfer of such pre-2017 investments shall be excluded from the ambit of GAAR.

See the General Anti Avoidance Rules (GAAR) section for more information.

E-filing of 41 (erstwhile Form 10F) without Permanent Account Number (PAN)

In order to be eligible to claim the tax treaty benefits, a non-resident is, inter alia, required to furnish certain details in Form 10F for FY 2025-26 i.e. from 1 April 2025 to 31 March 2026 and Form 41 for subsequent years. The said form is required to be filed electronically on the income tax portal. The Central Board of Direct Taxes (CBDT) has enabled non-residents, who do not have a PAN (i.e. tax identification number) and are not required to have a PAN, to e-file Form 41/ Form 10F on the income-tax portal by creating an account without the requirement of first obtaining a PAN.