In a significant move for taxpayers, the Union Budget 2026, presented by Finance Minister Nirmala Sitharaman on Sunday, February 1, 2026, has extended the deadline for filing revised Income Tax Returns (ITR) from December 31st to March 31st. This change aims to provide a more reasonable compliance window for individuals who may have missed the original deadline or need to rectify errors in their initial filings.
Revised ITR Filing: What's New?
The extension allows taxpayers additional time to revise their ITRs, addressing oversights orerrors. This is particularly beneficial for those who may have missed declaring certain income, such as bank interest details, or faced confusion regarding the new tax regimes. The revised deadline of March 31st comes with a nominal fee.
Other Key Income Tax Proposals in Budget 2026
Beyond the ITR revision deadline, the Union Budget 2026 included several other notable proposals related to income tax:
- No Changes in Income Tax Slabs and Rates: The Finance Minister did not introduce any changes to the existing income tax slabs and rates. Taxpayers will continue to be taxed as per the existing structure in the current financial year.
- Tax Collected at Source (TCS) Rate Reduction: The TCS rate for pursuing education and medical treatment under the Liberalised Remittance Scheme (LRS) has been reduced from 5% to 2%. Similarly, the TCS rate on the sale of overseas tour packages has also been reduced to 2% from the previous rates of 5% and 20%.
- Exemption for Motor Accident Claims Tribunal Awards: The budget proposes to exempt any interest awarded by the Motor Accident Claims Tribunal to a natural person from income tax..
- New Income Tax Act, 2025: The new Income Tax Act, 2025, will come into effect from April 1, 2026.
- Tax on Stock Buybacks: The Union Budget 2026 proposes to tax buy-backs for all types of shareholders as capital gains.
Impact and Analysis
The extension of the ITR revision deadline to March 31st offers taxpayers a significant opportunity to ensure compliance and rectify any errors in their filings. The reduction in TCS rates for education, medical treatment, and overseas tour packages is expected to provide some financial relief to individuals availing of these services.
The new Income Tax Act 2025 is set to bring significant changes to the taxation landscape, with a focus on simplified provisions and reduced compliance burden. It remains to be seen how these changes will impact taxpayers and the overall economy. The government is expected to release detailed rules and ITR forms in the coming weeks.
Other important dates:
- Individuals filing ITR-1 and ITR-2 will continue to have July 31 as their due date.
- Non-audit business cases and trusts will be given additional time, with a revised deadline of August 31.
Overall, the Union Budget 2026 contains several taxpayer-friendly measures, particularly the extension of the ITR revision deadline.