No need for Form 15G and 15H! TDS will be deducted Automatically, Read Tax updates announced in Budget 2026

Today, Finance Minister Nirmala Sitharaman presented the Union Budget 2026–27. Everyone was watching closely to see whether the government would announce any new tax reforms. The Finance Minister did not make any changes to the income tax slabs, but she proposed extending the revised ITR filing deadline to 31 March, subject to the payment of a nominal fee.

Individuals with ITR 1 and ITR 2 returns can file till 31 July, and non-audit business cases or trusts are proposed to be allowed time till 31 August. The government also proposed a reduction in the TCS rate for pursuing education and medical education under the liberalised remittance scheme from 5% to 2%.

In the previous Budget, the government had raised the standard deduction from ₹50,000 to ₹75,000.

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Changes related to tax announced in Union Budget 2026-27

New Income Tax Law from April 1: The central government will replace the old Income Tax Act 1961 with a new Income Tax Act 2025. This will come into effect from April 1st, 2026. There are no changes to tax rates or slabs. The aim is simply to simplify the process of filing tax returns.

Lower Tax on Sending Rupees Abroad: There will now be a lower Tax Collected at Source (TCS) on money sent abroad for education and medical treatment. The government has decided to reduce it from 5% to 2%. The TCS rates of 5% and 20% applicable to foreign tour packages have been reduced to 2%.

No Application Needed to Avoid TDS: This is one of the most important updates. There will be no need to submit a separate application to avoid Tax Deduction at Source (TDS). According to the rules, if you are not liable for income tax, TDS will not be deducted and you need not submit Form 15G or 15H. Currently, Form 15G (for those under 60) or Form 15H (for senior citizens) had to be submitted for this.

Revised Returns Can Be Filed Until March 31: The deadline for correcting errors in Income Tax Returns (ITR) has been extended. Now, revised returns can be filed until March 31st instead of December 31, subject to a nominal fee.

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No change in income tax slabs

There has been no change to the income tax slabs this time. If you choose the old tax regime, income up to ₹2.5 lakh remains tax-free.

Under the new tax regime, income up to ₹4 lakh is exempt from tax. With the benefit of Section 87A, salaried individuals can claim tax relief on income up to ₹12.75 lakh, while others can avail of an exemption on income up to ₹12 lakh.

Also Read: Download Union Budget 2026 Official PDF and Documents [Highlights PDF]

New Tax Regime Slabs

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