Union Budget 2026: Income tax slabs remained unchanged as no income tax relief was announced by Finance Minister Nirmala Sitharaman in Union Budget 2026 on Sunday, dashing the hopes of the middle class and salaried workers who were expecting major tax relief akin to what was introduced in last year’s Budget.
How Budget 2026 will impact middle class?
Unlike last year, Budget 2026 did not introduce any sweeping changes in income tax relief for the middle class and salaried individuals as tax slabs remain unchanged.
Ahead of the Budget, reports suggested that the Narendra Modi government could reconfigure tax slab, revising tax-free income to Rs 13 lakh from the current Rs 12.75 lakh by increasing the standard deduction from Rs 75,000 to Rs 1 lakh.
However, no tax relief was announced in the Budget document, with the government’s focus instead being on targeted tax reforms designed ease compliance and offer relief to small taxpayers, NRIs, and people making overseas remittances.
The Budget did not add to middle class savings in terms of tax relief as tax-free remains unchanged, which means the take-home pay for salaried workers also remains the same as last year.
What key changes were made in income tax?
Among the major changes announced in income tax is the extension of filing revised income-tax returns (ITR) up to March 31, subject to payment of a nominal fee.
Finance Minister Nirmala Sitharaman proposed that taxpayers can now file revised income-tax returns till March 31, instead of previous December 31 deadline, allowing individuals to correct genuine errors or omissions without facing harsher penalties.
Additionally, Sitharaman announced the deadline for filing ITR-1 and ITR-2 will continue to be July 31, while ITR timeline for small businesses and trusts to file was extended till August 31 in non-audit cases.
The government also also announced a one-time 6-month foreign asset disclosure window for small taxpayers, allowing individuals such as students, young professionals, tech workers and relocated NRIs to voluntarily declare their foreign assets without penal consequences.
The Budget also provides relief for equity investors as all share buybacks will now be treated as capital gains, while NRIs can now sell their property in India with more ease as the resident buyer will now deduct TDS, thus simplifying compliance and enforcement.
