New Delhi: Finance Minister Nirmala Sitharaman on Sunday left income tax rates and slabs unchanged, maintaining the structure introduced after last year’s sweeping tax reforms.
Presenting the Union Budget 2026–27, the Finance Minister announced a series of measures aimed at easing compliance and offering targeted relief to taxpayers. The deadline for filing revised income tax returns will be extended from December 31 to March 31, subject to a nominal fee.
Return-filing timelines will follow a staggered schedule, with individuals filing ITR-1 and ITR-2 required to submit returns by July 31, while non-audit business cases and trusts will have time until August 31.
To provide further relief, interest awarded to individuals by motor accident claims tribunals will be exempt from income tax, and the related tax deduction at source will be removed. Non-resident Indians supplying capital goods to Indian companies will also receive an income tax exemption for five years.
The Budget proposes a reduction in tax collection at source rates, lowering TCS on overseas tour packages to 2 per cent, down from the earlier 5 per cent and 20 per cent slabs, without any minimum threshold. TCS on education and medical expenses under the Liberalised Remittance Scheme will similarly be cut to 2 per cent from 5 per cent.
For small taxpayers, a new rule-based automated system will allow the issuance of lower or nil tax deduction certificates without the need to approach an assessing officer. Investors holding securities in multiple companies will also be able to submit Form 15G or 15H to depositories, which will transmit the forms directly to the concerned companies.
On the capital markets front, the Finance Minister proposed an increase in securities transaction tax, raising the levy 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.
With IANS inputs