Budget 2026: No Change on Income Tax Slabs and Standard Deduction
Budget 2026 kept income tax slabs and deductions unchanged, ending pre-Budget speculation on tax cuts while focusing on compliance and procedural reforms.
The Union Budget for the Financial Year 2026–27 was presented by Finance MinisterNirmala Sitharaman in the Lok Sabha today (Sunday, 1 February 2026). The government made no announcements regarding changes in income tax slabs or the standard deduction, putting to rest widespread speculation ahead of the Budget about possible tax relief for individual taxpayers.
In the run-up to Budget Day, there had been expectations and market chatter about revisions in personal income tax rates or an increase in the standard deduction. However, the Budget confirmed that the existing income tax structure for individuals will continue unchanged
While no rate or slab changes were announced, the Budget introduced several important income tax-related procedural and compliance measures. These include a reduction in Tax Collected at Source (TCS) on overseas tour packages to 2 per cent and a similar reduction in TCS on remittances for education and medical purposes under the Liberalised Remittance Scheme
The government also announced a rule-based automated system for obtaining lower or nil TDS certificates for small taxpayers. In addition, the time limit for revising income tax returns has been extended up to 31 March, subject to payment of a nominal fee. Filing deadlines for ITR-1 and ITR-2 remain unchanged at 31 July, while non-audit business cases will be allowed time until 31 August
Further, taxpayers will be allowed to update returns even after reassessment proceedings with an additional tax, and several procedural offences related to documentation and TDS compliance have been decriminalised. The framework for immunity from penalty and prosecution has also been expanded
Budget 2026 focuses on stability and simplification in personal taxation, rather than offering tax cuts, with the government prioritising compliance ease and trust-based tax administration over changes in tax rates.
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