The Finance Act, 2026

What it does

A Finance Act is passed every year to give effect to the financial proposals of the Union Budget. It fixes the rates of tax for the year, amends the statutes that impose taxes, and makes changes to other laws that the Budget proposes. It is not a code to be read as a whole. Each year's Act is a bundle of amendments and rate schedules, and its provisions take effect from the dates stated in them, often 1 April of the financial year.

This page is deliberately short. The firm's note on a non-resident Indian or Overseas Citizen of India cardholder selling a flat records that the Finance Act, 2026 has not been read for the purposes of that note. The note therefore does not state the surcharge or the health and education cess that sit on top of the tax rates it describes, and it does not state the rate of deduction at source that the Act sets. This page states the same limits.

Who it binds

Taxpayers within the statutes it amends or whose rates it fixes. The Act does not set a general duty of its own. It changes the rates and rules in the Income-tax Act, 2025 and in other tax and levy statutes, and the person bound is whoever those statutes bind.

What has changed, and when

The tax year that began on 1 April 2026 is the first under the Income-tax Act, 2025, which repealed the Income-tax Act, 1961. A Finance Act of 2026 sits on top of the 2025 Act for that year. The site also lists the Finance Act, 2025 and the Finance Act, 2006 as related instruments, because an older sale or an older transaction may still be taxed under what those Acts provided.

What turns on it in practice

The practical point is the surcharge and cess. A tax rate in the Income-tax Act is not the whole rate a taxpayer pays, because the Finance Act sets the surcharge and cess on top of it. The firm's note on a non-resident selling property in India gives the long-term capital gains rate of 12.5 per cent under section 197 of the 2025 Act and the buyer's duty to withhold under section 393(2), and it says plainly that the surcharge and cess are not stated. Anyone computing the buyer's deduction or the seller's liability should therefore read the Finance Act, 2026 itself for the rates that apply to the payee and the year, and should not rely on the figure in the principal Act alone.

The Act is relevant to the work of this practice wherever a sale, a remittance or a cross-border payment has a tax consequence. The firm's property and NRI advisory work depends on getting the dates right, because a transaction in the tax year 2026-27 is governed by the 2025 Act and not by section 195 of the 1961 Act.