Budget 2026 has introduced a series of important changes across income tax, compliance timelines, MAT, buyback taxation, foreign asset disclosure, TDS/TCS procedures, and litigation reforms.
These amendments impact traders, salaried individuals, business owners, NRIs, promoters, tax professionals, and cooperative sectors.
Here is a simplified breakdown of the key changes and what they mean in practice.
1. Income Tax Amendments – STT Increased for Traders
The government has increased Securities Transaction Tax (STT) on derivatives:
| Transaction Type | Old Rate | New Rate |
|---|---|---|
| Futures | 0.02% | 0.05% |
| Option Premium | 0.10% | 0.15% |
| Option Exercise | 0.125% | 0.15% |
Frequent F&O traders will see a noticeable rise in transaction costs, reducing net profitability.
2. Return Filing & Compliance – Major Relief
New ITR Filing Timelines
| Category | Due Date |
|---|---|
| ITR-1 & ITR-2 (Salaried/Investors) | July 31 |
| Non-audit businesses & trusts | August 31 |
Other Important Changes
Revised Return can now be filed up to March 31
Updated Return allowed even after reassessment by paying additional 10% tax
3. MAT Regime Changes (Very Important for Companies)
MAT rate reduced from 15% → 14%
MAT credit now usable only under the new tax regime
MAT exemption for non-residents taxed on presumptive basis
4. Buyback of Shares – Major Shift to Capital Gains
Buyback taxation is now moved from company-level tax to shareholder-level capital gains.
Additional tax on promoters:
| Promoter Type | Tax Rate |
|---|---|
| Corporate | 22% |
| Non-corporate | 30% |
5. Foreign Asset Disclosure – One-Time 6 Month Window
A big compliance opportunity for those with foreign assets/income.
Category A
Undisclosed asset/income ≤ ₹1 Cr
Pay 30% tax + 30% additional tax
Immunity from prosecution
Category B
Asset disclosed but not reported ≤ ₹5 Cr
Pay ₹1 lakh fee
Full immunity
6. Reliefs & Exemptions
MACT interest fully tax-exempt (no TDS)
TCS on overseas tour reduced from 5% → 2%
TCS under LRS: Education & medical: 2%
Liquor, scrap, minerals, tendu leaves: 2%
7. TDS & Procedural Simplifications
Manpower services now treated as contractor (TDS @ 1%/2%)
No TAN required for TDS on NRI property purchase
Automated TDS certificates for small taxpayers
Single Form 15G/15H valid across multiple companies
8. Litigation & Penalty Reforms
Single combined order for assessment and penalty
No interest on penalty during appeal
Pre-deposit for appeal reduced from 20% → 10%
Immunity scheme extended to misreporting cases (100% additional tax)
9. Decriminalisation of Minor Offences
Non-production of books, TDS in kind, and similar minor offences decriminalised
Maximum imprisonment reduced to 2 years (courts may levy fine instead)
Retrospective immunity for small undisclosed foreign assets (< ₹20 lakh)
10. Sector-Specific Incentives
Tax holiday till 2047 for foreign cloud companies
Deduction extended to cattle feed & cotton seed
Inter-cooperative dividends deductible if passed to members
3-year dividend exemption for notified national cooperative federations
Safe harbour rules: 15% margin for related-party data centre services
2% margin for bonded warehouse component storage
5-year tax exemption for:
Non-residents supplying tools to toll manufacturers
Foreign income of non-resident experts
