In Direct Taxes, many new reforms are proposed in the Union Budget 2026-27. The New Income tax Act, 2025 will come into effect from April 2026. Also the simplified Income Tax Rules and Forms will be notified shortly. The forms for the purpose are redesigned for easy compliance of ordinary citizens. There is also a proposed reduction in the TCS rates. The Overseas tour program package is reduced from the current 5 percent and 20 percent to 2 percent without any stipulation of amount. Further, TCS for pursuing education and for medical purposes under the Liberalized Remittance Scheme (LRS) reduced from 5 percent to 2 percent.It is also proposed that the supply of manpower services to be brought within the ambit of payment to contractors for the purpose of TDS. TDS on these services will be at the rate of either 1 percent or 2 percent only. For small taxpayers, a rule-based automated process will enable obtaining a lower or nil deduction certificate instead of filing an application with the assessing officer. Also, the time available for revising returns is proposed to be extended from 31st December to up to 31st March with the payment of a nominal fee. Further, the timeline for filing of tax returns is to be staggered.To address practical issues of small taxpayers, a One-time 6-month foreign asset disclosure scheme for students, young professionals, tech employees, relocated NRIs, and such others to be introduced to disclose income or assets below a certain size.
Read summary of Union Budget 2026-27 . Prepared by Our team member - Sonam_Financial Analyst
