Union Finance Minister Nirmala Sitharaman presenting the budget.
Small taxpayers, including young professionals, students, tech employees, and relocated NRIs, received a major boost in the Union Budget 2026 as Finance Minister Nirmala Sitharaman announced a one-time, six-month foreign asset disclosure scheme.
The window will allow individuals who failed to declare overseas income up to Rs 1 crore, or those who disclosed income but not assets acquired abroad up to Rs 5 crore, to regularise their filings without facing heavy penalties.
Sitharaman said the move aims to ease compliance for individuals who unintentionally missed disclosures and bring more foreign holdings into the formal tax net.
Alongside this, Sitharaman reaffirmed that the Income Tax Act 2025 will take effect from April 1, 2026, with simplified rules and forms to be notified soon.
The Budget also introduced several additional measures to streamline compliance. These include simplified income tax forms, tax exemption on interest awarded by Motor Accident Claims Tribunals, and reductions in TCS rates for overseas tour packages, as well as for education and medical remittances under LRS—both brought down to 2%.
The Finance Minister also proposed to increase time limit for filing revised I-T return from December 31 to March 31, on payment of nominal fee.
The government also proposed reduction in TCS rate for pursuing education and medical education under liberalised remittance scheme from 5 per cent to 2 per cent.
Tax Collected at Source (TCS) rate on sale of overseas tour packages was announced to cut to 2 per cent from 5 per cent. The rate was 20 per cent earlier.
She also proposed a rule-based automated process for small taxpayers in FY27 Budget.