Budget 2026 – What Changes for Individual Taxpayers?
Budget 2026 is less about rate cuts and more about structural reform. For most individuals, slab rates remain unchanged, but compliance rules, TCS on foreign spends and the shape of the law itself are evolving through the new Income Tax Act, 2025. Here is how these moves affect salaried individuals, entrepreneurs and HNIs.
1. New Income Tax Act from 1 April 2026
The new Act will replace the 1961 law from 1 April 2026. The government’s stated intent is a simpler, more readable law with fewer sections and redesigned ITR forms.
- No change in slab rates for FY 2026–27 – the new regime and old regime continue as is.
- Expect a single “tax year” concept to gradually replace the current previous-year / assessment-year distinction.
- Many procedural sections are being consolidated; detailed rules and forms will be notified closer to 1 April 2026.
2. Extended time to correct mistakes – revised and updated returns
Budget 2026 recognises that data mismatches (AIS/TIS, broker statements, bank interest) are now common. The deadline to file a revised return is extended to 31 March (12 months from year end), subject to a modest fee.
- More time to fix errors in income reporting or missed deductions.
- Scope to align ITR data with GST, TDS and broker statements before scrutiny.
- Updated returns continue to be available, but now with clearer rules and an additional tax top-up where income is increased.
3. TCS relief on overseas education, medical treatment and tour packages
The upfront cash hit from Tax Collected at Source on foreign remittances has been eased:
- TCS on overseas tour packages reduced to a flat 2%.
- TCS on foreign education and medical treatment remittances under LRS brought down from 5% to 2% above the applicable threshold.
- Education funded through formal education loans continues to enjoy preferential treatment.
Families planning foreign education or treatment should still track overall LRS limits and ensure adequate documentation of purpose.
4. TDS and property transaction simplifications
Several changes reduce friction in high-value transactions:
- Simplified TDS on property, including PAN-based TDS for specified NRI transactions.
- Centralised electronic handling of Forms 15G/15H to reduce branch-level processing issues.
- Rule-based online system for lower / nil TDS certificates aimed at small taxpayers.
5. What stays the same – and what you should do now
Despite the buzz around the new Act, some fundamentals remain constant:
- Slab rates and rebate thresholds remain unchanged.
- Choice between old vs new regime must still be evaluated based on your mix of salary, business income and deductions.
- Disclosures around foreign assets and high-value transactions will become more, not less, important.
6. How AMD & Co. can support you
From our office at Marathon Futurex in Lower Parel – Mumbai’s central business district – AMD & Co., Chartered Accountants, Mumbai works with promoters, families and professionals across India and overseas.
- Comparing old vs new regime for your specific income profile.
- Planning foreign remittances to optimise TCS and cash flows.
- Designing investment and ownership structures keeping the new Act in mind.
- End-to-end ITR support – from data collation and reconciliations to filing and responding to notices.