Finance Act 2026 Ushers Transformative Tax Changes

The Finance Act 2026 has been notified, implementing tax amendments for the fiscal year 2026-27. It includes a 12% surcharge on capital gains from company share buybacks. The Union Budget proposes Rs 53.47 lakh crore in expenditure, with projected fiscal deficit at 4.3% of GDP.

The central government has officially enacted the Finance Act 2026, introducing significant tax amendments for the fiscal year 2026-27. According to a gazette notification by the Ministry of Law and Justice, this act reflects the financial strategies articulated within the approved Union Budget.

Following the legislative approval, Parliament passed the Finance Bill 2026 on March 25 with 32 amendments. The bill, returned by the Rajya Sabha through a voice vote, was finalized after discussion and resolution of queries by Finance Minister Nirmala Sitharaman. Centered on a fiscal blueprint, the Union Budget outlines a total expenditure of Rs 53.47 lakh crore.

The fiscal strategy emphasizes increased capital expenditure of Rs 12.2 lakh crore and anticipates gross tax revenue of Rs 44.04 lakh crore against a gross borrowing target of Rs 17.2 lakh crore. Significantly, the Act introduces a flat 12% surcharge on capital gains from share buybacks, impacting tax costs for shareholders, previously under a lower surcharge category.

(With inputs from agencies.)