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REGISTERED NO. DL—(N)04/0007/2003—26
The Gazette of India
CG-DL-E-01022026-269757
EXTRAORDINARY
PART II — Section 2
PUBLISHED BY AUTHORITY
No. 1] NEW DELHI, SUNDAY, FEBRUARY 1, 2026/MAGHA 12, 1947 (Saka)
Separate paging is given to this Part in order that it may be filed as a separate compilation.
LOK SABHA
The following Bill was introduced in Lok Sabha on 1st February, 2026:—
BILL No. 3 OF 2026
A Bill to give effect to the financial proposals of the Central Government
for the financial year 2026-2027.
BE it enacted by Parliament in the Seventy-seventh Year of the Republic
of India as follows:––
CHAPTER I
PRELIMINARY
Short title
and
commence
ment.
1. (1) This Act may be called the Finance Act, 2026.
(2) Save as otherwise provided in this Act,––
(a) sections 2 to 113, clause (b) of section 136 and section 140 shall
come into force on the 1st day of April, 2026;
(b) clauses (c) and (d) of section 136 and section 142 shall come into
force on the 1st day of May, 2026;
(c) sections 137 to 139 shall come into force on such date as the
Central Government may, by notification in the Official Gazette, appoint.
CHAPTER II
RATES OF INCOME-TAX
Income-tax
under Act 43
of 1961.
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 (herein referred
to as the said Act) at the rates specified in Part I-A of the First Schedule and
such tax shall be increased by a surcharge, for the purposes of the Union,
calculated in each case in the manner provided therein.
(2) (a) Where an assessee as specified in column B of the Table below,
has, in the previous year, any net agricultural income exceeding five
thousand rupees, in addition to the total income, and the total income
exceeds the maximum amount not chargeable to income-tax as specified in
column C of the said Table, in respect of the said assessee, the net
agricultural income shall be taken into account, only for the purpose of
charging income-tax in respect of the total income.
43 of 1961.
TABLE
Sl. Assessee Maximum
No. amount not
chargeable to
income-tax
+-----+----------------------------------------------------------------------------------------------------+----------------+
| A | B | C |
+=====+====================================================================================================+================+
| 1. | (i) Every individual other than the individual referred to in Sl. No. 2 or 3; or | Rs. 2,50,000. |
| | (ii) Hindu undivided family; or | |
| | (iii) association of persons or body of individuals, whether incorporated or not; or | |
| | (iv) every artificial juridical person referred to in section 2(31)(vii) of the said Act, | |
| | not being an assessee to which Paragraph B, C, D or E of Part I-A of the First Schedule | |
| | applies or to whom Sl. No. 4 applies. | |
+-----+----------------------------------------------------------------------------------------------------+----------------+
| 2. | Every individual, being a resident in India, who is of the age of sixty or more but less than | Rs. 3,00,000. |
| | eighty years at any time during the previous year. | |
+-----+----------------------------------------------------------------------------------------------------+----------------+
| 3. | Every individual, being a resident in India, who is of the age of eighty years or more at any time | Rs. 5,00,000. |
| | during the previous year. | |
+-----+----------------------------------------------------------------------------------------------------+----------------+
4. Assessee whose income is chargeable to tax under
section 115BAC(1A) of the said Act.
Rs. 4,00,000.
(b) For the purposes of clause (a), the income-tax chargeable shall be
computed as per the following formula:—
Zo = Xo – Yo
where,––
Zo = the income-tax chargeable for the purposes of clause (a);
Xo = the amount of income-tax determined in respect of the Aggregate
Income (AIo) at the rates specified in Paragraph A of Part I-A of the First
Schedule or sub-section (1A) of section 115BAC of the said Act, as if such
AIo were the total income; and
Yo = the amount of income-tax determined in respect of the net agricultural
income increased by a sum as specified in column C of the Table mentioned
in clause (a) at the rates specified in the said Paragraph A or sub-section
(1A) of section 115BAC of the said Act, as if the net agricultural income as
so increased were the total income;
Aggregate Income (AIo) = Total income + Net agricultural income.
(3) In cases to which the provisions of Chapter XII or Chapter XII-A or
section 115JB or section 115JC or Chapter XII-FA or Chapter XII-FB or sub section (1A) of section 161 or section 164 or section 164A or section 167B of
the said Act apply, the tax chargeable shall be determined—
(i) as provided in that Chapter or that section; and
(ii) with reference to the rates imposed by sub-section (1) or the rates as
specified in that Chapter or section, as the case may be.
(4) For the purposes of sub-section (3),—
(a) the amount of income-tax computed in accordance with the
provisions of section 111A or section 112 or section 112A of the said Act
shall be increased by a surcharge, for the purposes of the Union, as provided
in Paragraph F of Part I-A of the First Schedule, except in case of—
(i) a domestic company whose income is chargeable to tax under
section 115BAA or section 115BAB of the said Act;
(ii) an individual or Hindu undivided family or association of
persons, or body of individuals, whether incorporated or not, or an
artificial juridical person referred to in sub-clause (vii) of clause (31) of
section 2 of the said Act whose income is chargeable to tax under sub section (1A) of section 115BAC of the said Act; or
(iii) a co-operative society resident in India, whose income is
chargeable to tax under section 115BAD or section 115BAE of the said
Act;
(b) in respect of income chargeable to tax under the section as specified
in column B of the Table below, in the case of a person as specified in
column C of the said Table, the amount of income-tax computed shall be
increased by a surcharge, for the purposes of the Union, calculated at the
rate or rates as specified in column D of the said Table, of such income-tax.
TABLE
+-------+----------------------------------------------+-----------------------------------------------------------------------------------------------------------+-------------------------------------------------------------------------------------+
| Sl. No. | Section | Person | Rate of surcharge |
| A | B | C | D |
+=======+==============================================+===========================================================================================================+=====================================================================================+
| 1. | 115A, 115AB, 115AC, 115ACA, 115AD, 115B, | (i) Every individual; or | (i) Where the total income exceeds Rs. 50,00,000 but does not exceed Rs. |
| | 115BA, 115BB, 115BBA, 115BBC, 115BBF, | | 1,00,00,000, at the rate of ten per cent.; |
| | 115BBG, 115BBH, 115BBI, 115BBJ, 115E, 115JB | (ii) Hindu undivided family; or | (ii) where the total income exceeds Rs. 1,00,00,000 but does not exceed Rs. |
| | or 115JC. | | 2,00,00,000, at the rate of fifteen per cent.; |
| | | (iii) association of persons, except in a case of an association of persons consisting of only companies as | (iii) where the total income exceeds Rs. 2,00,00,000 but does not exceed Rs. |
| | | its members, whether incorporated or not; or | 5,00,00,000, at the rate of twenty-five per cent.; |
| | | (iv) body of individuals, whether incorporated or not; or | (iv) where the total income exceeds Rs. 5,00,00,000, at the rate of thirty-seven |
| | | | per cent. |
| | | (v) every artificial juridical person referred to in section 2(31)(vii) of the said Act, | |
| | | not having any income under section 115AD of the said Act and not having any income chargeable to tax | |
| | | under section 115BAC(1A) of the said Act. | |
+-------+----------------------------------------------+-----------------------------------------------------------------------------------------------------------+-------------------------------------------------------------------------------------+
| 2. | 115A, 115AB, 115AC, 115ACA, 115AD, 115B, | (i) Every individual; or | (i) Where the total income exceeds Rs. 50,00,000 but does not exceed Rs. |
| | 115BA, 115BB, 115BBA, 115BBC, 1