April 1 Financial Rule Change Highlights: Income tax, salary, PAN, gratuity to undergo massive overhaul as FY27 starts

• Employers will issue Form 130 to salaried individuals
• Specified banks will issue it to eligible senior citizens
• Issuance of this certificate is mandatory once TDS has been deducted and deposited.

• To establish proof that the tax has been deducted and deposited with the government.
• To provide a clear summary of salary details, deductions and tax liabilities, if any.
• To help individuals claim TDS credit while filing their income tax returns (ITR)

Form 130 is a Tax Deducted at Source (TDS) certificate issued annually by employers or specified banks. As per the updated Income-Tax Rules, 2026, Form 130 will officially replace Form 16. This means salaried taxpayers will receive Form 130 instead of Form 16 from FY 2026–27 onwards.

Notably, the document also applies to specified senior citizens who earn interest income and receive pensions.

Budget 2026 relaxes compliance norms for taxpayers, noting that there will be no interest liability on the penalty amount during the appeal period before the first appellate authority, irrespective of the outcome.

Finance Minister Nirmala Sitharaman, during her Budget speech, proposed a tax exemption on awards given by the Motor Accident Claims Tribunal, with effect from 1 April.

“In order to alleviate the sufferings of victims of such an accident and their family, which may cause extreme hardship to the aggrieved person and family, it is proposed to amend the said Schedule to provide exemption to an individual or his legal heir, on any income in the nature of interest under the Motor Vehicles Act, 1988,” the Budget document reads.

Budget 2026 also reduced the TCS rate for pursuing education and for medical purposes under the Liberalised Remittance Scheme (LRS).

Under the new rule, the TCS rate for such purposes has been reduced from the current 5% to 2%. However, the ₹10 lakh threshold still remains.

For remittances under LRS for other purposes, including investments, overseas spending and more, the TCS rate remains 20% on amounts above ₹10 lakh.

The Budget has reduced the Tax Collected at Source (TCS) rate on the sale of overseas tour programme packages. The TCS rate on overseas tour packages has been reduced from the current 5% and 20% to 2%. The TCS rate cut has been done without any stipulation of the amount.

As a result, overseas travel through tour packages will reduce upfront costs and simplify travel for tourists.

Budget 2026 provides for taxpayers to file their revised ITRs beyond 31 December. Under Section 263(5) of the Income-tax Act, 2025, taxpayers can file revised returns to correct omissions or mistakes in the original ITRs.

This deadline was previously limited to 31 December of the relevant assessment year. From 1 April, taxpayers will be able to file their revised returns till 31 March. However, they will have to pay a nominal fee if they miss the 31 December deadline.

Starting April 1, 2026, applicants seeking a PAN card will be required to submit additional supporting documents along with their application. These include a birth certificate, voter ID, passport, driving license, matriculation certificate, an affidavit issued by a magistrate, among other government-issued documents.

New PAN application forms are expected to be introduced soon as part of the updated process, replacing the existing ones. From April 1, 2026, the current (old) PAN forms will no longer be accepted for fresh applications or updates.

Starting April 1, 2026, name on the card will be removed. PAN name will be as per Aadhaar only. Hence, applicants must ensure that their Aadhaar details are correct.

Until March 31, 2026, PAN applications could be made using only Aadhar. From April 1, 2026, applicants will need to submit extra documents, making this the last chance to apply through the simplified Aadhaar-based process.

Several changes related to Permanent Account Number (PAN) card applications are set to come into effect from April 1, 2026.

The updates were recently highlighted by CSC e-Governance Services India Limited in a post on X (formerly Twitter).

According to the post, the new rules will impact the way users apply for or process PAN cards. Applicants are advised to be aware of the revised guidelines so that they can act before the deadline.

Financial and regulatory changes in April 2026 include new tax rules, higher rebates, updated TDS forms, increased banking charges, changes in fuel prices and new travel refund rules. Here are 10 financial changes to look out for.

The following is the revised refund structure for train ticket cancellations:

• If cancelled between 8 and 24 hours before departure — 50% refund.
• If cancelled between 24 and 72 hours — 25% deduction.
• If cancelled more than 72 hours before departure, maximum cancellation charge applies, not a full refund.
• The refund in such cases depends on Indian Railways’ terms and conditions, which are subject to change.

The Indian Railways will now permit zero refund if tickets are cancelled within 8 hours of departure. Earlier, this timeline was 4 hours.

Punjab National Bank has decided to reduce the debit card withdrawal limit to ₹50,000 to 75,000 for select cards. Several cards that earlier had withdrawals of up to ₹100,000 will now have reduced limits.

Banks such as HDFC Bank will, from 1 April 2026, include UPI ATM withdrawals in the free limit. If you exceed five transactions, you will be charged ₹23 per transaction thereafter.

Similarly, Bandhan Bank will provide customers with three free transactions in metro cities and five in non-metro cities. ₹23 will be charged for additional transactions and ₹25 for any failed transactions due to insufficient balance.

Fuel costs, including PNG, CNG and aviation turbine fuel, will be revised, thus impacting airfares and day-to-day transportation within the nation. These price changes, if implemented, will affect citizens' lives comprehensively.