Legal and Policies
Early gratuity, WFH provision, gender-neutral wages: Centre enacts new labour codes
NEW DELHI: The Government of India brought all four Labour Codes into effect from 21 November 2025, triggering the most comprehensive reform of the country’s labour legislation in decades.The Ministry of Labour and Employment issued official notifications confirming the enforcement of the Code on Wages, Industrial Relations Code, Social Security Code, and the Occupational Safety, Health and Working Conditions Code.
The new regime consolidates 29 Central labour laws into four streamlined Codes, which the Centre described as a “historic modernisation” intended to simplify compliance, reduce fragmentation, and extend social protection to a wider workforce.
According to the Government, many of India’s earlier labour laws were framed before or soon after Independence and no longer reflected current economic realities. The unified Codes introduce universal minimum wages, mandatory timely payment of wages, and compulsory appointment letters for all categories of workers.
Workers across sectors, including gig, platform, contract, migrant, women and MSME workers, will now be covered under a harmonised framework of rights and protections. ESIC (Employees’ State Insurance Corporation) coverage has been expanded nationwide, including to establishments employing even one worker engaged in hazardous processes. Fixed-term employees will be eligible for gratuity after one year, instead of the earlier five-year threshold.
The new framework also mandates gender-neutral wages, permits women to work night shifts subject to prescribed safety measures, and provides free annual health check-ups for workers above 40. Gig and platform workers will, for the first time, receive social-security benefits financed partly through aggregator contributions.
Compliance has been made easier through a single registration, single licence, and single return, replacing the need for multiple filings. A new inspector-cum-facilitator system will focus on guidance instead of only enforcement, while faster industrial tribunals aim to speed up dispute resolution.
The Industrial Relations Code has also been overhauled to simplify how disputes are handled, how unions are recognised, and how companies manage workforce flexibility without compromising worker protection. It formalises work-from-home arrangements in the services sector, expands the definition of “worker,” and introduces two-member tribunals to speed up conflict resolution. Retrenched workers will additionally receive 15 days’ wages through a new reskilling fund to help support job transitions.
Sector-specific rules include double wages for overtime, stricter safety standards for mines and hazardous industries, and mandatory safety committees in larger workplaces. Additional protections extend to IT/ITES, plantations, ports, export units, beedi and cigar units, textiles, and audio-visual media.
The Government said these changes bring India’s labour system closer to global standards and support the “Aatmanirbhar Bharat” goal by improving both worker welfare and industry productivity. During the transition, older laws will remain in force until the new rules under each Code are finalised after consultations.
The Centre noted that India’s social-security coverage has risen from 19 per cent of the workforce in 2015 to over 64 per cent in 2025, and said implementation of the labour codes represents the next major step in building a “protected, productive and future-ready workforce.”
Legal and Policies
India’s new income tax law and higher F&O levies take effect from 1st April
A sweeping overhaul of the tax code, stiffer securities transaction taxes and relief for travellers and tech firms all land at once
NEW DELHI: India’s tax landscape shifts gears on Tuesday. The Income-tax Act, 2025, which replaces the Income-tax Act, 1961, comes into force from April 1, 2026, alongside a clutch of budgetary measures that will be felt by traders, tourists, technology firms and ordinary taxpayers alike.
The new Act is not a reinvention of tax policy so much as a tidying up of it. Gone is the unwieldy distinction between the assessment year and the previous year; in its place comes a single “tax year” framework designed to be more logical and reader-friendly. Taxpayers will also, for the first time, be able to claim tax deducted at source refunds even when income tax returns are filed after the deadline, without incurring penal charges.
For those who trade derivatives, however, the news is less comfortable. Securities transaction tax on futures contracts rises to 0.05 per cent from 0.02 per cent, while STT on options premiums and the exercise of options is hiked to 0.15 per cent from 0.1 per cent and 0.125 per cent respectively. The government has made no secret of its intent: the higher levy is aimed squarely at curbing speculative bets in the futures and options segment and shielding retail investors from ruinous losses. The numbers tell a grim story. The number of individual investors active in the F&O segment fell from 1.06 crore in FY25 to about 75.43 lakh by December 2025. A Sebi study found that individual investors had racked up net losses of more than Rs 1.05 lakh crore in FY25 alone.
Overseas travellers and those remitting money abroad for medical and education purposes get some relief. Tax collected at source on overseas tour packages has been slashed to 2 per cent from 20 per cent, while TCS on Liberalised Remittance Scheme transfers for medical and educational purposes drops to 2 per cent from 5 per cent.
The data centre industry, too, has reason to cheer. Any foreign company procuring data centre services in India will enjoy a 20-year tax holiday stretching to 2047, shielding its global income from Indian tax authorities. Whether a global firm sets up its own facility or simply buys services from an Indian data centre, the tax treatment will be identical, ensuring a level playing field. India’s effective corporate tax rate stands at 25.17 per cent.
Software companies get a further fillip: the safe harbour threshold for IT services has been raised sharply from Rs 300 crore to Rs 2,000 crore, a move designed to reduce litigation and give the sector greater certainty.
On the transition, the income tax department has confirmed that its e-filing portal will handle compliance under both the old and new Acts during the switchover period. Taxpayers filing returns for assessment year 2026-27, which covers the period governed by the old Act, will do so in July 2026 using the old forms. Advance tax payments for tax year 2026-27, commencing from June 2026, will follow the new Act.
One sweeping law, several sharp edges, and a deadline that waits for no one.
