Finance Bill 2026 sets new income-tax rates and introduces foreign asset disclosure scheme

It also amends various direct and indirect tax laws to implement the Central Government's financial proposals.

Who it concerns: Individuals, Hindu undivided families, associations of persons, bodies of individuals, artificial juridical persons, companies, and cooperative societies. It specifically targets 'small taxpayers' with foreign assets for the new disclosure scheme and affects entities subject to income-tax, customs, and goods and services tax.

What the bill does

• Sets income-tax rates and surcharges for the assessment year commencing April 1, 2026, under the Income-tax Act, 1961 and the Income-tax Act, 2025.
• Establishes the 'Foreign Assets of Small Taxpayers Disclosure Scheme, 2026,' allowing declarants to pay a specified amount for immunity from penalty and prosecution regarding undisclosed foreign income or assets.
• Specifies that amounts paid under the disclosure scheme are non-refundable and declared income/assets are excluded from total income and do not affect finality of completed assessments.
• Amends sections related to income-tax computation, agricultural income treatment, and surcharge rates for different categories of taxpayers (e.g., individuals, senior citizens, companies).
• Amends provisions under the Customs Act, Customs Tariff, Central Goods and Service Tax Act, and Integrated Goods and Service Tax Act.
• Amends the Finance Act, 2001, the Finance (No.2) Act, 2004, and the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.

Also in the document

• The Bill was introduced in the Lok Sabha on February 1, 2026.
• Most sections (2 to 113) come into force on April 1, 2026, while specific sections (137-139) come into force on a date appointed by the Central Government.
• The Bill creates a specific legal framework for the 'Foreign Assets of Small Taxpayers Disclosure Scheme, 2026' with defined powers for the Board to issue directions and make rules.