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Finance Minister Nirmala Sitharaman on Sunday presented the Union Budget 2026, keeping income tax rates and slabs unchanged after last year’s major overhaul. While the tax structure remains the same, the government announced several measures to ease compliance, adjust filing timelines, and offer targeted tax relief to individuals, NRIs, and small taxpayers.

No change in income tax slabs

The finance minister retained existing income tax rates and slabs, signalling continuity in the tax regime introduced last year. The focus of Budget 2026 remained on simplification rather than structural changes.

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The government proposed extending the deadline for revising income tax returns. Taxpayers will now be able to revise their returns until March 31 instead of December 31, subject to a nominal fee.

Staggered deadlines for filing returns

To reduce congestion and improve compliance, the Budget proposed different filing deadlines based on return types. Individuals filing ITR-1 and ITR-2 will continue to have a July 31 deadline. Non-audit business cases and trusts will get time until August 31.

Tax relief on tribunal interest and for NRIs

The finance minister announced that interest awarded by motor accident claims tribunals to individuals will be exempt from income tax. The government will also remove the related tax deducted at source (TDS).

Non-resident Indians supplying capital goods to Indian companies will get an income tax exemption for five years.

Lower TCS on foreign spending

The Budget proposed cuts in tax collection at source rates. TCS on overseas tour packages will drop to 2 per cent from the earlier 5 per cent and 20 per cent, with no minimum threshold.

Under the Liberalised Remittance Scheme, TCS on education and medical expenses will also reduce from 5 per cent to 2 per cent.

Easier process for lower or nil TDS certificates

Small taxpayers will benefit from a new automated, rule-based system that allows them to obtain lower or nil TDS certificates without approaching an assessing officer.

Simplified Form 15G and 15H submission

Taxpayers holding securities across multiple companies will be able to submit Form 15G or 15H to depositories. The depositories will forward the forms directly to the concerned companies.

Higher STT on futures and options

On the capital markets side, the finance minister proposed an increase in securities transaction tax. STT on futures will rise from 0.02 per cent to 0.05 per cent, while STT on options will increase from 0.01 per cent to 0.15 per cent.