Government notifies Finance Act 2026, changes in tax provisions

The Government has notified the Finance Act 2026, paving way for effecting changes in tax provisions.

This Act gives effect to financial proposals of the central government for 2026-27, a gazette notification dated March 30 issued by the Ministry of Law and Justice said. “The following Act of Parliament received the assent of the President on March 30, 2026 and is hereby published for general information,” it said.

Last week, Parliament approved the Finance Bill 2026 with the Rajya Sabha returning it to the Lok Sabha with a voice vote, completing the budgetary exercise for the next fiscal year starting April 1. The Lok Sabha had passed the bill on March 25, along with 32 amendments.

The Rajya Sabha returned the bill after a brief discussion, and Finance Minister Nirmala Sitharaman replied to queries raised by members. The Union Budget 2026-27 envisages a total expenditure of INR 53.47 lakh crore, an increase of 7.7 per cent over the current fiscal year ending March 31.The total capital expenditure proposed for the next fiscal year is INR 12.2 lakh crore.It proposes a gross tax revenue collection of INR 44.04 lakh crore and a gross borrowing of Rs 17.2 lakh crore.

The fiscal deficit for FY27 is projected at 4.3 per cent of GDP, lower than 4.4 per cent in the current fiscal.As per the provisions of Finance Act, a flat 12 per cent surcharge will be levied on capital gains earned by individual or corporate shareholders by selling shares in the buyback offer of companies from April 1.Imposing a flat 12 per cent surcharge on capital gains from buybacks for individual shareholders would significantly raise their effective tax cost, as a lower surcharge structure was applied earlier.

Currently, no surcharge is levied on taxable income up to INR 50 lakhs, while taxable income between INR 50 lakhs and INR 1 crore attracts a 10 per cent surcharge on capital gains from buybacks.