Union Budget 2026 introduces targeted reforms aimed at easing compliance, reducing litigation, and rationalizing personal taxation. While tax rates remain unchanged, several structural and procedural changes will significantly impact individual taxpayers, investors, and high-net-worth individuals.

1. More Time to File and Revise Your Income Tax Return

What’s changed?
The Government has extended timelines for filing and revising income tax returns to provide greater flexibility and reduce unintentional defaults.

Key Highlights

• • Revised Return Deadline extended from 31 December to 31 March,
  • Late fee applicable if filed after 31 December,
  • Due date for non-audit cases (businesses & trusts) shifted from 31 July to 31 August.

Why it matters

✔ More time for accurate reporting
✔ Reduced need for rectification and litigation

2. Relief for Foreign Asset Disclosures (FAST-DS 2026)

A major compliance relief for small and genuine taxpayers holding foreign assets.

What’s new?

• • No prosecution for non-disclosure of non-immovable foreign assets; applicable where aggregate value is below ₹20 lakh,
  • Retrospective effect from 1 October 2024.

Impact

✔ Relief from harsh prosecution provisions
✔ Encourages voluntary compliance

3. TCS Cuts on Foreign Spending and Outward Remittances

Budget 2026 rationalises Tax Collected at Source (TCS) to reduce cash-flow pressure on individuals.

Revised TCS Rates

• • Overseas tour packages: Reduced to 2%
  • Outward remittances for education & medical treatment: Reduced from 5% to 2%

Who benefits?

✔ Students studying abroad
✔ Families funding overseas education or healthcare
✔ Individuals planning foreign travel

4. Buyback Taxation Shifted to Capital Gains in Shareholders’ Hands

A significant structural change impacting investors and promoters.

What’s changed?

• • Buyback proceeds will now be taxed as capital gains in the hands of shareholders,
  • Moves away from the earlier dividend-style taxation
  • Applicable to buybacks on or after 1 April 2026

Why this matters

✔ Aligns buyback taxation with global practices
✔ Enhances transparency
✔ Impacts high-value and promoter-driven buybacks

5. Sovereign Gold Bonds (SGBs): Exemption Narrowed

Tax exemption on Sovereign Gold Bonds is now more targeted.

New Rules

• • Capital gains exemption at redemption retained only for original subscribers,
  • Secondary market buyers will be taxed on gains at applicable capital gains rates,
  • Applicable from 1 April 2026

Impact

✔ Protects long-term original investors
✔ Removes arbitrage benefits for secondary buyers

Conclusion: A Taxpayer-Friendly Yet Disciplined Approach

Budget 2026 does not overhaul tax rates but refines the personal tax framework through:

• • Procedural ease,
  • Reduced litigation,
  • Rationalised compliance,
  • Better alignment with economic realities.

For taxpayers, investors, and professionals, early planning is key to maximising benefits under the new regime.