The Lok Sabha has passed the Finance Bill 2026, with amendments proposed by Union Finance Minister Nirmala Sitharaman. The amendments clarify that a flat 12% surcharge will apply to share buybacks, reducing the effective tax burden for promoters and high-income taxpayers.
However, experts note that the 12% flat rate could increase the tax burden for small buybacks, as the surcharge is levied based on income thresholds.
The amendments also include a clarification on electronically granted approvals in assessment proceedings, which cannot be invalidated due to procedural lapses.
The new Income Tax Act 2025 aims to reduce litigation by raising monetary limits for filing appeals.
The bill also proposes to remove arrest provisions in cases of non-payment of tax dues by an assessee in default.
