Stock market new rules from April 1, 2026: Important changes every trader, investor should know

Following Finance Minister Nirmala Sitharaman’s prior announcements, the Income Tax Act of 2025 has officially replaced the decades-old 1961 framework. While your fundamental tax slabs and rates remain the same, the new legislation significantly modernises how individuals and companies calculate their taxes, income, etc. 

Also, the confusing dual system of financial year (FY) and assessment year (AY). Moving forward, any income you earn from April 1 will simply fall under a unified, single ‘Tax Year.’

Several specific market and trading adjustments are taking effect as the new calendar flips. Here are a few major changes you need to know:

F&O trading 

For derivatives traders, as outlined in the Union Budget 2026–27, the securities transaction tax (STT) hike on futures and options (F&O) officially kicks in tomorrow, April 1.

The government has raised the STT on futures contracts from 0.02 per cent to 0.05 per cent. Meanwhile, the tax on options premiums will climb from 0.10 per cent to 0.15 per cent, and the STT on the exercise of options will rise from 0.125 per cent to 0.15 per cent. Keep in mind that this revision targets F&O trades, leaving standard STT rates across all other market segments completely untouched.

Share buybacks

The rulebook for corporate actions is also getting a major rewrite. Beginning Wednesday, April 1 (applicable for the 2026–27 tax year onwards), the rulebook for share buybacks is also getting a rewrite, the money shareholders receive from share buybacks will be taxed under ‘capital gains.’

In the previous system, buyback consideration was treated as dividend income alongside a separate capital loss. Under this new structure, individual promoters will face a 30 per cent tax, while promoter companies will be taxed at 22 per cent.

Dividends and mutual funds

Investors relying on mutual funds and dividends will need to recalculate their tax strategies. Under the Income Tax Act 2025, these earnings fall strictly under “income from other sources.”

Previously, taxpayers could claim an interest deduction of up to 20 per cent under Section 93. However, a new step scraps this benefit, meaning you can no longer deduct any interest expenses against this income category. 

Stricter margins

On the regulatory front, SEBI’s updated margin framework mandates that F&O traders must maintain at least 50 per cent of their total collateral in cash or cash equivalents, such as fixed deposits or bank guarantees. 

To add to the shifting landscape, major industry players like Zerodha are reportedly  to double their brokerage fees on select intraday derivative trades starting April 1.

Settlement delays to watch

While March 31 serves as a full market holiday, April 1 functions as a settlement holiday. Because of this brief pause in the clearing cycle, any intraday profits or F&O credits you generated just before the break. You will not be able to use those funds for fresh trading or withdraw them into your bank account from April 2.