Budget 2026 Income Tax Announcements: Finance Minister Nirmala Sitharaman made a number of announcements to help taxpayers, however the 2026 budget did not alter income tax rates. According to the Finance Minister, the new income tax law will take effect on April 1st, and information about its regulations and Income Tax Return (ITR) forms will be released shortly.
Just fines, no jail time
For taxpayers, this budget offers a number of significant benefits. The government’s decision to abandon the strategy of tying income tax laws to criminal charges is the biggest shift. The Finance Minister made it clear that there would no longer be an instant jail sentence if a taxpayer’s income was proved to be inconsistent or if tax evasion was discovered. Such cases can now be addressed by paying a fine. The new Income Tax Act, which will take effect on April 1, 2026, will include this structure. A 30% tax was announced by the Finance Minister. This implies that people who hide their income will pay a 30% tax rather than face jail time.
Assistance for Individuals with Foreign Assets
Those who own undeclared assets overseas have also received relief. They can reveal their assets under a disclosure scheme within the next six months. The budget also has good news for people who want to travel or send their kids to study abroad. The TCS (Tax Collected at Source) on international travel packages, medical care, and education used to vary from 5% to 20%, greatly raising the price. The administration has now lowered it to a fixed 2%. This implies that whether it’s for education, medical treatment, or a foreign trip, the strain on your budget will be substantially less than before.
Easy Opportunity to Correct ITR Filing Errors
Making a small mistake while filing returns is common. Earlier, correcting it was a difficult and lengthy process. Now, the Finance Minister has announced that taxpayers will get more time to file revised returns. A nominal fee will be charged for this.
Return Filing Dates
The government has also clarified the return filing dates. Taxpayers filing ITR-1 and ITR-2 will be able to file their returns by July 31st. The deadline for non-audited businesses and trusts will be August 31st. In addition, the process for obtaining lower or nil TDS certificates for small taxpayers has now been completely automated, eliminating the need to visit tax offices.
Buying property from NRIs is now easier.
Until now, when buying property from an NRI, the buyer had to obtain a TAN number to deduct TDS, which was cumbersome for ordinary people. This hassle has been eliminated in the budget. Now, buyers can deduct TDS directly without needing a TAN.
Investing is also easier
Furthermore, the process for Form 15G and 15H has also been simplified for investors who have invested in multiple companies. Now, depositories will accept these forms and send them directly to the relevant companies, allowing investors to complete the process from the comfort of their homes.
Disclaimer: This content has been sourced and edited from TV9. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.
FAQs: Budget 2026 – Income Tax Announcements
1. Were there any changes in income tax rates in Budget 2026?
No, Budget 2026 did not change income tax rates. The Finance Minister clarified that the new Income Tax Act will come into effect on April 1, 2026, and detailed rules along with ITR forms will be released shortly.
2. Are there any changes regarding penalties or jail for tax evasion?
Yes. The biggest shift is that taxpayers will no longer face instant jail if income discrepancies or evasion are found. Cases can now be resolved by paying a 30% tax on undisclosed income.
3. What relief is offered for foreign asset holders?
Individuals with undeclared overseas assets can now disclose them under a six-month disclosure scheme without facing severe penalties.
4. Has TCS on international expenses changed?
Yes. The Tax Collected at Source (TCS) on international travel packages, medical treatment, and education abroad has been reduced from 5–20% to a flat 2%, easing financial burdens for taxpayers.
5. Can taxpayers easily correct ITR mistakes now?
Yes. Budget 2026 allows taxpayers more time to file revised returns, with only a nominal fee, making it easier to correct errors.
6. What are the new ITR filing deadlines?
ITR-1 and ITR-2: July 31, 2026
Non-audited businesses and trusts: August 31, 2026
7. Has the TDS process for small taxpayers been simplified?
Yes. Obtaining lower or nil TDS certificates is now fully automated, eliminating the need to visit tax offices.
8. Is buying property from NRIs easier now?
Yes. Buyers no longer need a TAN to deduct TDS when purchasing property from an NRI. TDS can now be deducted directly.
9. Have Form 15G and 15H procedures been simplified for investors?
Yes. Investors holding multiple company shares can now submit Forms 15G/15H via depositories, which forward them directly to the respective companies, allowing home-based processing.
10. When does the new Income Tax Act come into effect?
The new Income Tax Act will be implemented from April 1, 2026.
11. Who announced these changes?
Finance Minister Nirmala Sitharaman presented these measures as part of Budget 2026 to provide relief and simplify compliance for taxpayers.
12. Does this mean no one will face jail for tax evasion now?
While minor evasion or discrepancies can now be resolved with a 30% tax, serious cases involving deliberate fraud may still face legal action under applicable laws.
13. How will this affect taxpayers’ travel and education abroad?
With TCS reduced to 2%, the cost of sending children abroad for studies or traveling internationally is significantly lower.
14. How does this budget help individual investors?
Investors can now submit multiple Forms 15G/15H online via depositories, making tax compliance simpler and faster without visiting offices.
15. Where was this information sourced from?
This content is sourced and edited from TV9, with modifications for clarity and readability. The original content belongs to TV9 and its authors.
