Currently, the Income Tax Act of 1961 is in effect in India, but starting April 2026, a new Income Tax Bill will be implemented. It is being said that taxpayers will get several benefits under the new bill. However, a common question is how the tax filing process under this new law will differ from the existing one. For years, taxpayers have been using the old law for deductions, exemptions, and TDS refunds, but now some key changes are coming. Here’s an easy explanation of what will change from April 2026.
No Late Penalty on TDS
One major change is that if you fail to file your Income Tax Return (ITR) before the deadline, you can still claim your tax refund. Moreover, if you miss the deadline for submitting your TDS details, you won’t be charged any penalty. In short, there will be no fines or late fees related to TDS information.
Also Read: 6 Key Changes Expected in the New Income Tax Bill 2025
Zero TDS Certificate
If your income does not fall under the taxable limit, you can now use a Zero TDS Certificate. This will save you from the hassle of filing unnecessary tax returns. The biggest advantage is that this benefit will be available to both Indian residents and Non-Resident Indians (NRIs).
Relief on Pension Funds
Another important benefit is for those receiving pensions from certain notified pension funds such as LIC Pension Fund. The commuted pension received from these funds will now be completely tax-free. With this change, employees working in the private sector will enjoy the same tax exemptions as government employees.
Key Points for ITR Filing in 2026
It’s important to note that the income tax slabs will remain unchanged. The main aim of the new bill is to simplify tax rules and reduce the time and effort required for tax filing.