More Time for Filing Revised Income Tax Returns
Finance Minister Nirmala Sitharaman on Sunday proposed extending the deadline for filing revised income tax returns, offering taxpayers additional time to correct or update their filings. Under the proposal announced in the Union Budget 2026-27, the last date for submitting a revised return would be moved from December 31 to March 31, subject to payment of a nominal fee.The move is aimed at easing compliance for taxpayers and reducing procedural pressure, particularly for individuals who may require more time to reconcile financial details.
Lower TCS Rates Under Liberalised Remittance Scheme
The Budget also announced a reduction in Tax Collected at Source rates for individuals remitting funds abroad for education and medical purposes under the Liberalised Remittance Scheme. The TCS rate for these categories has been proposed to be lowered to 2 per cent from the existing 5 per cent.In a related measure, the TCS rate on the sale of overseas tour packages has also been proposed to be reduced to 2 per cent from 5 per cent. This rate had earlier been as high as 20 per cent, making the latest proposal a significant relief for outbound travellers.
Automated Process for Small Taxpayers
As part of efforts to simplify tax administration, the Finance Minister proposed introducing a rule-based automated process for small taxpayers. This system is expected to be implemented from the 2026-27 financial year and is intended to streamline compliance while minimising manual intervention.Motor Accident Compensation to Be Tax-Free
Another key proposal in the Budget is the exemption of awards granted by Motor Accident Claims Tribunals from income tax. The measure seeks to ensure that compensation received by accident victims or their families is not reduced by tax liabilities.Together, these tax proposals signal a push towards simplified compliance, targeted relief, and greater use of automation within the income tax framework.
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