New Delhi, Feb 1 Finance Minister Nirmala Sitharaman on Sunday presented the Union Budget 2026, keeping income tax rates and slabs unchanged following last year’s major tax reforms.
While the basic tax structure remains the same, the FM announced several measures aimed at simplifying tax compliance and providing relief to taxpayers.
The FM proposed extending the timeline for revising income tax returns from December 31 to March 31 with a nominal fee.
FM Sitharaman also suggested staggered deadlines for filing returns: individuals using ITR‑1 and ITR‑2 will continue to file by July 31, while non-audit business cases and trusts will have time until August 31.
To benefit taxpayers further, any interest awarded by the motor accident claims tribunal to an individual will now be exempt from income tax, and the corresponding TDS will be removed.
Non-resident Indians (NRIs) providing capital goods to Indian companies will also enjoy income tax exemption for a period of five years.
The FM proposed changes to the tax collection at source (TCS) rates, reducing it from 5 per cent and 20 per cent to 2 per cent on the sale of overseas tour packages without any minimum amount.
Similarly, TCS on education and medical expenses under the Liberalised Remittance Scheme (LRS) will drop from 5 per cent to 2 per cent.
To make compliance easier for small taxpayers, a new rule-based automated system will allow obtaining a lower or nil deduction certificate without filing an application with the assessing officer.
Additionally, taxpayers holding securities in multiple companies will be able to submit Form 15G or 15H to depositories, which will forward it directly to the relevant companies.
On the securities front, the FM proposed increasing the securities transaction tax (STT) on futures from 0.02 per cent to 0.05 per cent and on options from 0.01 per cent to 0.15 per cent.
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