Page 25 - NIS English 16-28 Feb, 2026

COVER STORY UNION

Ease of Living BUDGET

2026-27
Legal complexities reduced. The new income tax law is to be implemented from April 1st.

No changes have been made to the A new scheme for small taxpayers where
income tax slabs or exemptions. The a certificate for lower or zero deduction
Income Tax Act, 2025, will come into can be obtained through an automated
effect from April 1, 2026. process based on rules, without applying
to the assessing officer.
Simplified income tax rules and
forms will be notified soon. The new Proposal to extend the deadline for
forms have been redesigned for easier revising returns from December 31st to
compliance by the common citizen.
March 31st by paying a nominal fee.
The interest determined by the Motor
Accident Claims Tribunal will not be There will be different deadlines for filing
subject to income tax for the common tax returns. Those filing ITR-1 and ITR-2
person. No TDS will be deducted on this will have until July 31st, as before. While
either. non-audited business cases and trusts will
be given time until August 31st.
Proposal to reduce the TCS rate levied on
the sale of foreign travel packages from There will be no need to obtain a TAN
the existing 5% and 20% to 2%, without for deducting TDS on the sale of
any monetary limit. immovable property by a non-resident.
The resident buyer can deposit the TDS
Proposal to reduce the TCS rate under through a challan based on their PAN.
the Liberalised Remittance Scheme (LRS)
for education and medical purposes from
5% to 2%. A new scheme is proposed for students,
young professionals, technical staff, NRIs
To remove confusion regarding TDS, it residing abroad, and other small taxpayers.
is proposed to clearly bring the supply of A 6-month period will be given to declare
manpower services under the category of foreign assets.
payments to contractors. The TDS rate
on these services will be only 1% or 2%.

Rationalising Penalty and Prosecution

n A proposal to combine assessment and penalty n The taxpayer will be able to update their return even after
proceedings into a single common order. No interest reassessment proceedings by paying an additional tax of
will be charged from the taxpayer on the penalty 10% over and above the rate applicable for the relevant year.
amount during the first appeal period. The amount to n Relief from penalty and prosecution in cases of under-
be deposited upfront is being reduced from 20% to reporting of income will now be extended to cases of
10%. misreporting as well. However, in such cases, the taxpayer
will also have to pay 100% of the tax amount as additional
income tax.
n Failure to furnish accounts or documents and failure to
deduct TDS on payments in kind will not be treated as an
offence. Only a penalty will be levied in minor cases.

February 16-28, 2026 || NEW INDIA SAMACHAR 23