CA Varun Gupta
Quick Summary
The Union Budget 2026-27 has been presented and the Government announced several amendments relating to Income-tax. A topic-wise summary of the key Direct Tax (Income-tax) proposals is provided below for your quick reference. The relevant extract from the Budget Speech has also been attached with th
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FAQ :
The new Income-tax Act, 2025, will be enforced from 1 April 2026, marking a full transition to the new code for financial years and tax years starting on or after this date.
Interest received by a natural person from a Motor Accident Claims Tribunal (MACT) will now be exempt from income tax, and Tax Deducted at Source (TDS) will no longer be applicable on this interest.
The TCS rate for overseas tour packages has been simplified to a single rate of 2%, regardless of the amount spent, a reduction from the previous two-tier system of 5% or 20%.
The window for filing revised income tax returns has been extended up to 31 March of the following tax year, offering an additional three months to correct any mistakes.
Yes, the budget introduces rationalisation of penalties and prosecution, including integrating assessment and penalty orders, reducing pre-deposit for appeals, and decriminalising certain minor offences.
For all shareholders, buybacks of shares will now be treated as Capital Gains for tax purposes, a change from the previous treatment as dividend income.
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