Finance Minister Nirmala Sitharaman has announced no changes to the existing income tax slabs while presenting the Union Budget on Feb. 1, 2026.
However, the Finance Minister announced some key proposals and changes pertaining to direct taxes including an extension of filing revised income tax returns.
“I propose to extend time available for revising returns from 31st December to up to 31st March with the payment of a nominal fee. I also propose to stagger the timeline for filing of tax returns – individuals with ITR 1 and ITR 2 will continue to file till 31st July and non-audit business cases or trust are proposed to be allowed time till 31st August,” said FM Sitharaman.
She also proposed TDS on sale of immovable property by NRI to be deducted by resident buyer compared to earlier requirement of TAN.
Further, Sitharanman has proposed to allow taxpayers to update returns even after reassessment proceedings have been completed with 10% tax. FM has proposed to rationalise prosecution framework in Income Tax Act.
She also proposed exemption from TDS on motor accidents, “I propose that any interest awarded by the motor accident claims tribunal to a natural person will be exempt from income tax and any TDS on this account will be done away with,” SItharaman said.
Budget 2025 Recap
Last year, in a bid to provide massive relief to the middle class the Finance Minister had announced that under the new regime, a taxpayer with an income of Rs 12 lakh will get a benefit of Rs 80,000 in tax for assessment year 2025-26. This made up of 100% of tax payable as per existing rates, Sitharaman said.
Therefore, there would be no income tax payable for up to Rs 12 lakh per annum income under the new tax regime.
According to tax slabs changes made in Budget 2025, there will be no tax imposed on those with income starting from Rs 0 to Rs 4 lakh, 5% tax will be imposed on income between Rs 4 lakh to 8 lakh and 10% tax for income up to Rs 8 lakh to Rs 12 lakh.
There will be 15% tax for income of Rs 12 lakh to Rs 16 lakh and 20% for income of Rs 16 lakh to Rs 20 lakh. There will be a 25% tax on income of Rs 20 lakh to Rs 24 lakh. Any income above Rs 24 lakh will be taxed at 30%.
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Tax benefits across income categories different income categories.
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