Budget 2026: No changes to income tax slabs, new Act to take effect on April 1

Union Finance Minister Nirmala Sitharaman announced no changes to income tax rates and slabs in the Union Budget for financial year 2026-’27 on Sunday, but said that the 2025 Income Tax Act will take effect from April 1.

“The simplified income tax rules and forms will be notified shortly, giving adequate time to taxpayers to familiarise themselves with the new requirements,” Sitharaman told Parliament.

The new Income Tax law, which replaced the 1961 Income Tax Act, was passed by Parliament in August.

Deadline for revising returns extended

Sitharaman announced that tax-paying timelines will be staggered, and the deadline for revising filed income tax returns will be extended from December 31 to March 31, on the payment of a nominal fee.

The deadline for those filing ITR-1 – meant for salaried individuals and pensioners earning up to Rs 50 lakh – and ITR-2 – meant for individuals and Hindu Undivided Families who do not fall in the ITR-1 category – will remain July 31.

During last year’s Budget, Sitharaman had announced that there would be no income tax payable for income up to Rs 12 lakh per annum under the new regime. Under the new regime, rolled out in February 2023, salaried employees who have a gross income of up Rs 12.75 lakh have zero tax liability, considering the standard deduction of Rs 75,000.

Previously, income of up to Rs 7 lakh per year was exempt from income tax.

Also read:

• Budget 2026: Nirmala Sitharaman proposes hiking capital expenditure to Rs 12.2 lakh crore
• Budget 2026: Fiscal deficit estimated to be 4.3% of GDP in 2026-’27

Read more on Budget 2026 here.