• Source:JND

Finance Minister Nirmala Sitharaman presented the Union Budget 2026 in Parliament today. During her speech, she announced several measures aimed at providing relief to salaried individuals and the middle class.

These announcements carry significant weight, particularly as there were no changes made to the income tax slabs or standard deduction for the upcoming financial years. Here are the key proposals that could impact your personal finances:

New Income Tax Act

According to the budget speech, a new Income Tax Act will come into effect from April 1, 2026. Simplified income tax rules and forms will be announced soon. The forms have been redesigned to ensure that ordinary citizens can comply with them without any hassle.

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Automated Process For 'NIL' Deduction Certificates

A new scheme has been proposed for small taxpayers, allowing them to automatically obtain lower or zero deduction certificates through a rule-based process. This will eliminate the current requirement of filing applications with Assessing Officers.

No Income Tax On Motor Accident Claims

The Finance Minister proposed that interest awarded to any individual by a Motor Accident Claims Tribunal will be exempt from income tax, and no TDS (Tax Deducted at Source) will be applicable on such amounts.

Rationalisation Of TCS And TDS Rates

Two major announcements were made regarding tax collection and deduction:

Overseas Travel: The TCS (Tax Collected at Source) on overseas tour packages has been reduced from the current 5 per cent and 20 per cent to a flat 2 per cent without any conditions.

LRS Scheme: For education and medical purposes under the Liberalised Remittance Scheme (LRS), the TDS has been slashed from 5 per cent to 2 per cent.

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TDS On Manpower Supply

To remove ambiguity, the supply of manpower services has been brought under the ambit of payments made to contractors for TDS purposes. Consequently, TDS on these services will now be levied at a rate of only 1 per cent or 2 per cent.

Extension Of Revised ITR Filing Deadline

The deadline for filing a revised Income Tax Return (ITR) is proposed to be extended from December 31 to March 31, subject to the payment of a nominal fee.

Depositories To Accept Form 15G And 15H

Taxpayers holding securities in multiple companies can now request their Depository to collect Form 15G or 15H and submit it directly to the respective companies on their behalf.

ITR Filing Deadlines

There is no change in the filing deadline for individuals using ITR-1 and ITR-2; it remains July 31. however, a proposal has been made to allow non-audit business cases or trusts to file until August 31.

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Property Sales By NRIs

For the sale of immovable property by non-residents, it is proposed that the resident buyer can deduct and deposit TDS using a PAN-based challan instead of requiring a TAN (Tax Deduction and Collection Account Number).

Foreign Asset Disclosure Scheme

A one-time, six-month "Foreign Asset Disclosure Scheme" has been proposed for students, young professionals, tech employees, and NRIs. This allows for the disclosure of foreign income or assets below a certain threshold.

Customs Duty On Personal Goods Halved

The tariff rate for the import of goods for personal use has been proposed to be reduced significantly, dropping from 20 per cent to 10 per cent.


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