The Finance Act, 2026 has been enacted to give effect to the financial proposals of the Central Government for the financial year 2026–27. It prescribes income-tax rates, surcharge provisions, and cess applicable for the assessment year commencing April 1, 2026, under the Income-tax framework. The Act also introduces provisions for computation of tax including treatment of agricultural income and applicability of surcharge across different categories of taxpayers.

1. Short title and commencement
   “(1) This Act may be called the Finance Act, 2026.
   (2) Save as otherwise provided in this Act,—
   (a) sections 2 to 129, clause (b) of section 152 and section 156 shall come into force on the 1st day of April, 2026;
   (b) sections 153 to 155 shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.”
2. Rates of income-tax (Section 2)
   “(1) Subject to the provisions of sub-sections (2), (3), (4) and (5), for the assessment year commencing on the 1st day of April, 2026, income-tax shall be charged under the provisions of the Income-tax Act, 1961 … at the rates specified in Part I-A of the First Schedule and such tax shall be increased by a surcharge…”
3. Basic exemption limits
   • ₹2,50,000 – General individuals/HUF/AOP
   • ₹3,00,000 – Senior citizens (60–80 years)
   • ₹5,00,000 – Super senior citizens (80+ years)
   • ₹4,00,000 – Assessees under section 115BAC(1A)
4. Inclusion of agricultural income for rate purposes
   “Aggregate Income (AIo) = Total income + Net agricultural income.”
5. Surcharge provisions
   Surcharge applicable based on total income slabs, including:
   • 10%, 15%, 25%, and 37% for individuals and specified entities depending on income thresholds
   • Special capped surcharge of 15% on dividend and capital gains income in specified cases
6. Health and Education Cess
   “…shall be further increased by an additional surcharge… ‘Health and Education Cess on income-tax’, calculated at the rate of four per cent. of such income-tax and surcharge…”
7. Definition provisions
   Includes definition of “domestic company” and “net agricultural income” for the purposes of tax computation.