While Budget 2026 may appear uneventful at first glance because income tax slabs remain unchanged, a closer look reveals a series of reforms that directly impact how taxpayers file returns, disclose income and comply with tax laws. Instead of offering headline-grabbing tax cuts, the government has focused on simplifying the tax system and resolving long-standing procedural challenges.
One of the most significant announcements is the rollout of a new Income Tax Act from April 1, 2026. The revised law, which replaces the Income Tax Act, 1961, is intended to be easier to understand and simpler to comply with, particularly for individual taxpayers and small businesses.
The Budget also extends return filing timelines for certain categories of taxpayers, giving non-audit business taxpayers and trusts more breathing room. The window for filing revised returns has been expanded as well, allowing corrections until March 31, subject to a nominal fee.
Taxpayers can expect simpler income tax forms and clearer rules, designed to reduce dependence on tax professionals. The government has promised sufficient transition time so that taxpayers can adapt smoothly.
For those spending or studying abroad, Budget 2026 offers relief by lowering Tax Collected at Source on foreign tour packages, overseas education and medical expenses under the Liberalised Remittance Scheme. This move reduces cash flow pressure on individuals making legitimate foreign payments.
A one-time foreign asset disclosure scheme has also been announced to help students, professionals and returning NRIs regularise minor past non-disclosures without facing prosecution. Small overseas assets and income below a specified threshold can be disclosed by paying tax and a penalty, with immunity available in select cases.
Additionally, compliance for investors has been simplified. Depositories will now collect Form 15G and Form 15H and submit them directly to companies, eliminating repetitive paperwork.
In essence, Budget 2026 prioritises clarity, compliance ease and predictability. While it may not deliver immediate tax savings, it aims to create a more transparent and less intimidating tax system for the future.
