Budget 2026: What Changes for Taxpayers Now?

No Income Tax Slab Changes in Budget 2026: Finance Minister Nirmala Sitharaman, while presenting her ninth Union Budget on 1 February 2026, did not announce any changes to income tax slabs under either the old or the new tax regime. This left salaried individuals and the middle class largely disappointed, as expectations of tax relief were high.

Old vs New Tax Regime Remains the Same: Both tax regimes continue with their existing structures. Under the old regime, income above ₹10 lakh is taxed at 30%, while the new regime offers a graduated slab system starting with zero tax up to ₹4 lakh and rising to 30% beyond ₹24 lakh. Standard deductions and rates remain unchanged.

Revised ITR Filing Deadline Extended: A key relief for taxpayers is the extension of the revised income tax return filing deadline. The government has proposed allowing revised returns to be filed until 31 March of the relevant assessment year, instead of the earlier 31 December deadline, with a nominal late fee.

TCS Cut Brings Relief for Overseas Spending: Budget 2026 reduced Tax Collected at Source on overseas tour packages to a flat 2%, down from earlier rates of 5% and 20%. TCS on foreign education and medical remittances under the Liberalised Remittance Scheme was also lowered to 2%, easing cash-flow pressure for families.

One-Time Foreign Asset Disclosure Scheme: The Budget introduced a special disclosure window for small taxpayers who paid taxes on income but failed to report foreign assets. Assets valued up to ₹5 crore can now be disclosed by paying a ₹1 lakh fee, with immunity from penalties and prosecution.

Higher STT on F&O Signals Policy Shift: Securities Transaction Tax has been increased on futures and options trades, while remaining unchanged for other segments. The move is aimed at discouraging excessive short-term trading and nudging investors toward longer-term investment strategies, though experts warn of potential impact on liquidity.

Focus Shifts to Compliance Ease, Not Tax Cuts: While Budget 2026 did not offer direct tax relief, it focused on simplifying compliance through staggered ITR deadlines, automated schemes for small taxpayers, clarity under GST rules, and the rollout of the new Income Tax Act, 2025 from April 2026. The above information is based on a Mint live updates report and is for educational purposes only.

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