If you're filing your Income Tax Return (ITR), this is very important news for you. Effective April 1, 2026, significant changes to the country's income tax system will directly impact taxpayers. According to the changes announced by the central government in Budget 2026, the new Income Tax Act, 2025, has now come into effect. The old Income Tax Act, which was in effect since 1961, is now history. 

The new law simplifies the language, making it easier for taxpayers to understand and follow the rules. However, there are no changes to the existing income tax slabs.

Taxpayers filing their Income Tax Returns (ITRs) have also received significant relief. For taxpayers whose accounts are not eligible for audit, the deadline for filing ITR-3 and ITR-4 has been extended from July 31st to August 31st. However, the deadline for filing ITR-1 and ITR-2 remains July 31st.

Additionally, the deadline for filing revised returns has been extended from December 31 to March 31. However, if the revised return is filed after December 31, higher fees may apply.

The government has also revised the rate of Tax Collected at Source (TCS). The TCS rate on the sale of liquor, scrap, as well as coal, lignite, and iron ore has been increased from 1% to 2%. The TCS rate on the sale of tendu leaves has been reduced from 5% to 2%.

Remittances for foreign travel under the Liberalised Remittance Scheme (LRS) will now attract a uniform TCS of 2 per cent, and TCS has also been reduced on remittances for education and medical treatment.

PC: Zee Business