Finance Minister Nirmala Sitharaman, in the Budget 2026-27, maintained the existing income tax rates and slabs, continuing the reforms from the previous year. She introduced measures to simplify tax compliance and offer relief to taxpayers, including extending the deadline for revising income tax returns to March 31 with a nominal fee.
Individuals using ITR-1 and ITR-2 will have a deadline of July 31 for filing returns, while non-audit business cases and trusts will have until August 31. Additionally, interest awarded by the motor accident claims tribunal to individuals will now be exempt from income tax, with the removal of corresponding TDS.
Non-resident Indians providing capital goods to Indian companies will be exempt from income tax for five years. The Finance Minister proposed reducing the tax collection at source (TCS) rates on the sale of overseas tour packages to 2 percent without a minimum amount, and lowering TCS on education and medical expenses under the Liberalised Remittance Scheme (LRS) to 2 percent.
To simplify compliance for small taxpayers, an automated system will enable obtaining a lower or nil deduction certificate without applying to the assessing officer. Moreover, taxpayers with securities in multiple companies can submit Form 15G or 15H to depositories, which will forward it to the relevant companies directly. The FM also suggested increasing the securities transaction tax (STT) on futures and options.
