Outlook Business Desk
Income tax rules will see several changes from April 1, 2026 following amendments announced in Union Budget 2026. The government has introduced measures to simplify compliance for taxpayers, including revisions in Tax Collected at Source rates, Securities Transaction Tax and return filing deadlines.
India’s tax framework will see a major shift as the Income Tax Act 2025 replaces the decades-old Income Tax Act 1961.The new legislation will apply from the 2026–27 financial year, reflecting changes in the economy, technology and work landscape.
Despite the introduction of the new Income Tax Act 2025, the government has kept income tax slabs unchanged for the 2026–27 financial year. Taxpayers will continue to pay taxes under the same slab structure currently in place.
The government has extended the deadline for filing ITR-3 and ITR-4 for non-audit taxpayers. The due date will now be August 31 instead of the earlier timeline and this updated deadline will also apply for returns filed for FY 2025–26.
The deadline for filing ITR-1 and ITR-2 remains unchanged at July 31 after the end of the relevant tax year. Meanwhile, the due date for completing tax audits also stays the same at October 31.
Taxpayers will now get additional time to correct their returns. The deadline to file a revised income tax return has been extended to March 31 from December 31 of the relevant financial year, though an extra fee will apply for revisions filed after December 31.
Additionally, Budget 2026 also revised several Tax Collected at Source rates. TCS on alcoholic beverages increased to 2% from 1%, while scrap and mineral sales will attract 2%. However, tendu leaves TCS falls to 2% from 5% to simplify compliance.
Tax rules on foreign remittances under the Liberalised Remittance Scheme (LRS) have been simplified. TCS on overseas tour packages now becomes a flat 2% rate without threshold, while remittances for education and medical treatment drop to 2%.
The government also raised Securities Transaction Tax (STT) for equity derivatives, increasing futures STT to 0.05% and options STT to 0.15%. From April 2026, share buyback proceeds will also be taxed as capital gains instead of deemed dividends.