ITR Deadline Extended: While presenting the Union Budget 2026, Finance Minister Nirmala Sitharaman made several important announcements for taxpayers. She stated that the new Income Tax Act will come into effect from April 1, 2026, and that the income tax rules have been made simpler and more transparent. A new scheme has also been proposed for small taxpayers to make tax compliance easier.
Budget 2026 Nirmala Sitharaman: ITR filing deadline extended
Finance Minister announced that the last date for filing ITR-1 and ITR-2 has been extended to July 31. This will provide significant relief to millions of salaried individuals and small taxpayers. The government says that along with simplifying the forms, the tax filing process has also been made digital and user-friendly. However, no changes have been made to the income tax slabs in this budget.
ITR Deadline Extended: Budget 2026-27: Fiscal Deficit Reduced
Finance Minister informed Parliament that the government has fulfilled the promise made in 2021-22. According to budget estimates, the fiscal deficit is projected to be 4.4 percent of GDP in 2025-26, and is expected to decrease to 4.3 percent in 2026-27. The government’s focus is on accelerating growth while maintaining fiscal discipline.
Budget 2026: Rs 1.4 Lakh Crore for States, Big Relief in TCS and TDS
The budget also included major announcements for the states. The Finance Minister stated that states will receive grants worth ₹1.4 lakh crore in the financial year 2027. The debt-to-GDP ratio for FY 2027 has been set at 55.6 percent, while net borrowing is projected at ₹11.7 lakh crore. In Budget 2026, the government provided significant relief in TCS (Tax Collected at Source) rates. The TCS on remittances sent abroad for education and medical treatment under the Liberalised Remittance Scheme (LRS) has been reduced from 5 percent to 2 percent.
This will provide relief to families who send money abroad for educational or medical purposes. To remove ambiguity in tax rules, the government clarified that the supply of human resource services will be included in the category of payments made to contractors. Under this, these services will now attract only 1 percent or 2 percent TDS (Tax Deducted at Source), providing convenience to both businesses and workers.
ITR filing: No action against taxpayers
Finance Minister Nirmala Sitharaman announced in her budget speech that the government will implement a new Income Tax Act from April 1, 2026. This will be notified soon. This will simplify income tax filing, and the forms will also be easier to understand. The limit for undisclosed income has also been increased to ₹1 crore.
ITR Delay Penalty: Relief for taxpayers
In the Union Budget 2026-27, Finance Minister Nirmala Sitharaman announced relief for taxpayers. She stated that the deadline for filing ITR-1 and ITR-2 has been extended to July 31. This will provide significant relief to millions of salaried individuals and small taxpayers. The government has emphasised simplifying the forms and making the tax filing process digital and user-friendly. No changes have been made to the income tax slabs in this budget. This move will not only reduce penalties for late filing but also make tax compliance easier and more transparent.
Also Read- Union Budget 2026 Explained: Quick guide to Fiscal Deficit, Capital Expenditure & Budget Glossary
