Finance Minister Nirmala Sitharama on Sunday presented her ninth Budget amid high-hopes from taxpayers amid the buzz of joint taxation for couples. However, the budget failed to bring any cheer for the income tax payers as Finance Minister Sitharaman put more emphasis on the economy, manufacturing, infrastructure and import-export ecosystem and left the income tax slabs untouched.
However, FM Sitharaman announced that the New Income Tax Act will take effect from 1 April 2026. She also said that the simplified Income Tax rules & forms will allow citizens to comply without difficulty.
The FM also said that the individuals filing ITR-1 and ITR-2 will continue to file till 31st July, while non-audit business cases or trusts will be allowed time till 31st August, one month extension from the earlier deadline.
FM Sitharaman also said that interest awarded by the Motor Accident Claims Tribunal to a natural person to be exempt from Income Tax. She also announced a reduction of the tax collected at source (TCS) rate on the sale of overseas tour program packages from the current 5% and 20% to 2%, without any stipulation of amount.
The budget 2026 also proposed a reduction of the TCS rate for pursuing education and for medical purposes under the Liberalised Remittance Scheme (LRS) from 5% to 2%. She also announced the extension of time for revising returns from 31st December to 31st March, with payment of a nominal fee.
There were reports of the government allowing joint taxation for couple – husband and wife – therefore allowing them to increase the tax exemption ceiling. However, no such relief was announced.
