Budget 2026-27: No Change to Income Tax Rates and Slabs, Focus Shifts to Simpler Compliance
The Union Finance Minister, Smt. Nirmala Sitharaman presented the Budget 2026-27 on Sunday, February 01, 2026, keeping income tax slab rates and slabs the same as the previous year. This financial year, no significant changes have been proposed to the basic tax structure of the nation; instead, the government has tried to make the compliance language simpler for the taxpayers to understand, making sure changes are more taxpayer-friendly.
Among these changes, some of the key proposals include extending the time limit to furnish revised returns from December 31 to March 31. Additionally, the government has also set a nominal fee for the taxpayers furnishing revised returns after the time limit of nine months in order to avoid unnecessary delays. The government has proposed to extend the ITR due date for the taxpayers whose accounts are not required to get audited from July 31 to August 31. However, no relief has been given in the case of furnishing ITR‑1 and ITR‑2; the due date for them is the same as earlier, i.e., July 31, 2025.
The government has proposed to give an income tax exemption to the Non-resident Indians (NRIs) providing capital goods to the Indian companies for a period of five years.
Changes have been proposed to the TCS (Tax Collected at Source) rates by the government. TCS rates have been reduced on the sale of overseas tour packages from 5 percent and 20 percent to 2 percent, without any stipulation of the amount. The TCS rate for pursuing education and medical purposes under the Liberalised Remittance Scheme (LRS) has also been proposed to be reduced from 5% to 2%.
The government has proposed to amend Schedule XIV of the Income Tax Act, allowing non-life insurance companies to claim a deduction in a later year for expenses where TDS was not deducted or paid on time, once the tax is actually deducted and paid.
