NEWS DETAILS

key changes related to Income Tax announced in the Union Budget 2026-27 (presented on 1 Feb 2026 by Finance Minister Nirmala Sitharaman)

1. No Change in Income Tax Slabs and Rates

• The Government did not change income tax slab rates for FY 2026-27; the existing new tax regime slabs remain as before: Nil up to ₹4 lakh, rising progressively to 30% above ₹24 lakh.

• Under the new regime, effective tax-free income extends up to around ₹12 lakh for many taxpayers after rebate and standard deductions.

Why this matters: There’s no direct tax cut this year, but predictability continues with the status quo on slabs and rates.

📜 2. New Income Tax Act, 2025 (Effective from 1 April 2026)

• A completely redesigned Income Tax Act, 2025 will replace the 1961 law from April 1, 2026.

• It simplifies provisions, reducing the number of sections by around half and aims to cut litigation and ambiguity.

• Introduces a single “tax year” concept, replacing the old “previous year – assessment year” system.

Effect: Simplified compliance, modern structure, and clearer procedures for all taxpayers.

🧑‍💻 3. Extended ITR Revision Deadline

• Taxpayers can now revise their Income Tax Return (ITR) up to 31 March (previously 31 Dec) on payment of a nominal fee.

• This gives more time to correct returns and reduces filing pressure.

💡 4. Relief & Compliance Simplification for Small Taxpayers

• Introduction of an automated “Nil Deduction Certificate” for small taxpayers to reduce unnecessary TDS deductions.

• Goal: Fewer refunds, less queuing for low-income individuals, pensioners, and small business owners.

📉 5. Changes in TDS / TCS and Related Tax Rules

• TCS (Tax Collected at Source) rates under the Liberalised Remittance Scheme (LRS) are being lowered for overseas education and medical remittances.

• New mandatory TDS provisions on certain non-resident property sales and manpower services.

• Proposal for staggered return filing timelines to ease system load.

📊 6. Other Income Tax–Linked Measures

• Interest awarded by Motor Accident Claims Tribunals is now fully tax-exempt with no TDS.

• Provisions to tighten crypto-income reporting with penalties for non-compliance.

• Stock buyback proceeds will be taxed as capital gains under the revised framework.

• Rationalised TDS/TCS compliance to support ease of doing business.

📌 Summary — What It Means for You

✔ No tax slab/rate cuts this Budget — relief comes from process reforms, not lower rates.
✔ Major legal overhaul with the new Income Tax Act coming into force.
✔ More time & simplified compliance for individuals and small taxpayers.
✔ TDS/TCS reforms and simplified reporting to reduce friction in tax filing.