Budget – 2026-27, was presented on 1st February, 2026, for the first time in history of our proud government, though it was SUNDAY, a public holiday. Today is 16th February, 2026, that means 15 days have passed. During this 15days most of the person have gone through it and taken their views whether it satisfy their expectation or not. We know that every year there are lot of expectations by the tax payers and they will decide whether they are satisfied or not?
There are 128 changes made in Direct Taxes, 13 changes made in Indirect Taxes, which includes Customs 08, Central Goods and Services Tax 04, Integrated Goods and Service Tax 01 and Miscellaneous 03 which comes to 144 amendments.
DIRECT TAX: AN OVER VIEW
- Income Tax Act, 1961 which was replaced after Income Tax Act,1922 that means after 39 years, while Income Tax Act, 1961 is now replace after 64 years and will know as Income Tax Act, 2025, effective from 1st April, 2026. The simplified income tax rules and Forms will be notified. Income Tax Provisions of current Financial Year (F.Y.2025-26) shall continue under the older law framework (Income-tax-Act, 1961). Therefore return fillings and Audit Report for F.Y.2025-26 will be based on the provisions of the Income Tax Act 1961.
- Exemption of interest on compensation amount awarded by Motor Accident Claims Tribunal, to a victims of motor vehicle accident and their family.
- Rate of TCS on sale of overseas tour program package is reduced from 5% or 20% depending upon package cost to 2%.
- Reduce TCS rate from 5% to 2% for LRS remittance for education and medical.
- Rate of TCS on sales of specific goods namely alcoholic liquor, scrap and minerals will be rationalized to 2%. TCS on tendu leaves will be reduced from 5% to 2%.
Changes in provision related to TDS/TCS are as under:
| Nature of Transections | Old Rate | New Rate |
| Sale of alcoholic liquor for human consumption | 1% | 2% |
| Sale of tendu leaves | 5% | 2% |
| Sale of scrap | 1% | 2% |
| Sale of minerals (being coal, lignite or iron ore) | 1% | 2% |
| Remittance under Liberalized Remittance Scheme (LRS) | 5% | 2% |
| Sale of overseas tour program package | 5% / 20% | 2% |
- Scheme for small tax payers wherein rule based automated process for obtaining lower or nil deduction certificate instead of filling manual application with the assessor.
- Single window filling with depositories for Form No 15G or 15H from tax payers holding securities in multiple companies.
Rationalizing due dates for filling of return of Income:
Section 263(1) (c) of 2025 Act makes the provisions for filling return of Income by taxpayers. It is proposed to extend the due dates for filling return of income by various assesses. The revised due dates are as under:
| Sr. No | Person | Conditions | Original Due Date | Proposed Due Date |
| 1 | Assessee including the partners of the Firm | Where Transfer Pricing is applicable | 30th Nov. | 30th Nov. |
| 2 | (i) Company
(ii) Assessee (other than a company) whose accounts are required to be audited under this Act or under any other law in force (iii) Partners of a firm whose accounts are required to be audited under this Act or under any other law in force |
Where Transfer Pricing is not applicable | 31st Oct. | 31st Oct. |
| 3 | Assessee having income from business or profession who is not subject to audit under this Act or any other law Partner of a firm whose accounts are not required to be audited under this Act or under any other law in force |
Where Transfer Pricing is not applicable | 31st July | 31st Aug. |
| 4 | Any other assessee | ——– | 31st July | 31st July |
These amendment will effective from 1st April, 2026, for tax year 2026-27.
Similar amendments are proposed to be made in Section 139(1) of Income Tax Act, 1961 to extend the due date of filling return of income for non-audit business cases and Trusts requiring no audits.
The above amendment will take effect retrospectively from 1st March, 2026, for the Assessment Year 2026-27(previous year 2025-26).
Extending the period of filling revised return.
As per Section 263 of the Income Tax Act, 2025, a revised return can be furnished within 9 months from the end of the tax year or before completion of assessment, whichever is earlier. This due date for filling belated return for any year also coincides with the due date for filling revised return. Hence, a person who has filed belated return o the last date available for the same, is not in a position to file revised return.
It is therefore proposed to amend section 263(5) of the Act, so as to increase the prescribed time limit from 9 months to 12 months from the end of tax year. However it proposed to introduce levy of fees of Rs. 5,000 for such revised return filed after 9 months from the end of the tax year, where total income of the assesse exceeds Rs. Five lakhs and a fee of Rs. 1,000 where the total income does not exceed Rs. 5 lakhs.
This will take effect from the tax year 2026-27 onwards.
Over and above amendments there are many other amendments are also suggested.
Author Bio
Thank you for breaking down the key changes so clearly. With 144 amendments, taxpayers and professionals will definitely need to stay updated and plan carefully.