Budget 2026 Highlights

The Union Budget 2026-27, presented on 1 February 2026, focused on tax simplification and administrative reforms under the new Income Tax Act, 2025, which comes into effect on 1 April 2026.

While there were no changes to income tax slabs or rates for individuals this year, significant changes were made to share buyback taxation, Securities Transaction Tax (STT), and Tax Collected at Source (TCS) rates.

Personal Income Tax Highlights:-

Income Tax Slabs: No changes were made under either the New or Old tax regimes.

Revised ITR Deadline: The deadline for filing revised income tax returns has been extended to 31 March (from 31 December) with a nominal fee.

Accident Claim Exemption: Interest from the Motor Accident Claims Tribunal to natural persons is fully exempt from income tax and TDS.

Foreign Asset Disclosure: Small taxpayers have a 6-month window to disclose foreign assets/income below a certain size without heavy penalties.

Standard Deduction: Remains at ₹75,000 for the new regime and ₹50,000 for the old regime.

Capital Markets & Investments:-

Share Buyback Overhaul: Buyback proceeds are now taxed as Capital Gains, allowing deduction of purchase costs.

Promoter Buyback Tax: Promoters face an additional tax: 22% for corporate and 30% for non-corporate promoters.

Securities Transaction Tax (STT) Hike:

Futures: Increased to 0.05%.

Options Premium: Increased to 0.15%. Upstox +6

Indirect Tax & TCS/TDS Reforms

TCS Rate Cuts:

Overseas tour packages: Reduced to a flat 2%.

LRS remittances for education and medical purposes: Reduced to 2%.

Alcoholic liquor, scrap, and minerals: Rationalised to 2%.

Customs Duty Relief:

Cancer Drugs: Basic customs duty exempted on 17 drugs/medicines.

Personal Imports: Duty on dutiable goods for personal use reduced from 20% to 10%.

Corporate & IT Sector:

Minimum Alternate Tax (MAT): Reduced to 14% and becomes the "final tax" after 1 April 2026.

Data Centres: Foreign companies providing cloud services via Indian data centres receive a tax holiday until 2047.