No Change in Rates for FY26-27

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Finance Minister Nirmala Sitharaman just delivered her ninth Budget. But for the middle class, the news is a total dud. The government chose to keep income tax slabs exactly where they were last year. Many people hoped for a higher standard deduction,the FM focused on a massive overhaul of the tax law itself. You won’t pay less tax this year. The wait for a real break continues.

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At a Glance

• The Slabs: Zero changes to tax rates or brackets for FY 2026-27.

• The Win: TCS on foreign tour packages slashed from 20% to just 2%.

• The Date: Revised ITR filing window now extends to March 31.

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The New 2025 Income Tax Act

The government is binning the 60-year-old tax law. The new Income Tax Act, 2025 will take over on April 1. This new law aims to cut down the number of sections by nearly half. Plus, it removes the confusing gap between the “Assessment Year” and “Previous Year.” Everything will now fall under a single Tax Year framework. So, while your rates didn’t drop, the legal jargon might finally make sense.

Revised ITR: A New March Deadline

Filing errors just got easier to fix, the FM extended the deadline for revised returns to March 31. Previously, you only had until December 31 to correct a mistake. But this extra time comes with a catch. You must pay a nominal fee of ₹1,000 if your income is below ₹5 lakh, anyone earning more must pay ₹5,000 for the late revision. This is a huge relief.

TCS and TDS: Cheaper Foreign Trips

Your next holiday abroad will be cheaper upfront. Because of the new rules, the government cut the Tax Collected at Source (TCS) on overseas tours to a flat 2%. Before this, you might have paid up to 20% on high-value bookings. TCS on money sent for education or medical treatment is now capped at 2%. This move targets middle-class families, there will be no TDS on interest from Motor Accident Claims Tribunals.

Slab Comparison: Old vs. New Regime

Income Slab	Old Regime Rate	New Regime Rate (Default)
Up to ₹2.5 Lakh	Nil	Nil
₹2.5L to ₹4 Lakh	5%	Nil
₹4L to ₹8 Lakh	5% (above 5L = 20%)	5%
₹8L to ₹12 Lakh	20% (above 10L = 30%)	10%
₹12L to ₹16 Lakh	30%	15%
Above ₹24 Lakh	30%	30%

Human Insight: The Hidden Compliance Win

Don’t bank on this money yet—I’ve seen these promises of “simplification” turn into more paperwork before. The government didn’t give a tax cut because they are betting on the “Income Tax Act 2025” to reduce court cases.

Pro-Tip: If you have minor errors in your previous filings, use the new March window. Because of the automated rule-based processing, you are less likely to get a manual notice, the real saving isn’t in the tax rate. It’s in avoiding the cost of a tax lawyer.

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