Presenting her ninth Union Budget on Sunday, Finance Minister (FM) Nirmala Sitharaman announced simpler tax norms for the people of India. She further announced that the new Income Tax (IT) Act will kick off from April 1, 2026.
"In July 2024, I announced a comprehensive review of the Income Tax Act 1961. This was completed in a record time, and the Income Tax Act 2025 will come into effect from first April 2026,” said FM Sitharaman as she delivered the financial statement on Sunday.
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She asserted that a strong savings culture is essential for a developing economy and that the new tax regime would simplify taxation.
Extends time for revising returns
The Finance minister extended the time available to revise returns from December 31 up to March 31 with the payment of a nominal fee. "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," the FM announced.
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She further proposed to rationalise the prosecution framework under the IT Act. "I propose to rationalise prosecution framework under Income Tax Act, while maintaining a careful balance for deterrence in some serious offense, non-production of books of account and documents and requirement of tedious payment, where payment is made in kind are being decriminalized,” the Finance Minister said.
