Legal and Policies
RBI proposes Rs 25,000 shield for cyber fraud victims in India
MUMBAI: The Reserve Bank of India has proposed a new framework to compensate bank customers up to Rs 25,000 for losses arising from small-value fraudulent digital transactions, marking a major push to strengthen consumer protection in the fast-growing payments ecosystem.
Announcing the final bi-monthly monetary policy of the financial year, RBI governor Sanjay Malhotra said the central bank would shortly release draft revised instructions for public consultation, including limits on customer liability in unauthorised electronic banking transactions.
The move updates rules last issued in 2017, which set timelines and scenarios for zero or limited customer liability. Malhotra said rapid technological adoption across banking and payments systems had made a comprehensive review necessary.
Alongside the fraud compensation framework, the RBI will issue three separate draft guidelines covering mis-selling of financial products, recovery of loans and conduct of recovery agents, and advertising and sales practices by regulated entities.
Malhotra flagged growing concerns around third-party financial products being sold at bank counters without adequate suitability checks, adding that new instructions would ensure offerings match customer needs and risk appetite.
The central bank will also harmonise existing rules governing loan recovery agents across different regulated entities to improve conduct standards and customer protection.
In a parallel capacity-building push, Malhotra announced the launch of Mission Saksham, a sector-wide training and certification programme for urban co-operative banks. The initiative aims to upskill around 1.40 lakh participants through physical training programmes and a scalable digital learning platform, with content delivered in regional languages wherever possible.
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.
