India’s New Income Tax Bill: Key Changes Effective from Tax Year 2026-27

India’s New Income Tax Bill: Key Changes Effective from Tax Year 2026-27

The Old law had 819 sections across 98 chapters, but the new bill reduced it to 536 sections and 23 chapters making it much easier to read and follow.

Earlier taxpayers had to deal with Previous Year and Assessment Year but now the bill launches just one Tax Year, reducing it for everyone.

The new bill retains the Rs 12 lakh basic exemption limit with no change in the threshold, giving continued relief to the middle class.

Under the new bill, tax authorities can access social media, emails, and even cloud storage, bringing more investigation into every aspect of your digital life.

Now it is compulsory for the tax department to issue prior notice before taking any related actions. Which means taxpayers will be informed in advance and given a chance to reply.

The new bill ensures that even if you miss the ITR filing due date, then you can still file later and claim your TDS refunds. This makes sure taxpayers don’t lose their refund rights due to a delay.

Trusts can no longer freely accept anonymous donations. If they do, then such donations will be taxed at a higher rate, as the new bill aims to prevent black money from being routed through charities.

When Will the New Bill Take Effect?

The New Income-tax bill comes into force from April 1, 2026, bringing in a clearer, modernized tax regime for the financial year 2026-27.