01 February,2026 03:38 PM IST | Mumbai | mid-day online correspondent
Finance Minister Nirmala Sitharaman presents the Union Budget 2026 in the Lok Sabha on Sunday. PIC/PTI
Finance Minister Nirmala Sitharaman presented the Union Budget 2026 in Parliament on Sunday. For salaried employees, the key takeaway from the speech is continuity and simplification rather than new tax cuts or major changes to slabs and rates.
The Finance Minister did not propose any revisions to Income Tax slabs or rates under either the old or new tax regime for FY 2026-27.
This maintains stability following the significant relief provided in the previous budget.
The most important announcement for taxpayers is the rollout of the New Income Tax Act, 2025, which will replace the Income Tax Act, 1961, from April 1, 2026.
The Finance Minister noted that a comprehensive review of the 1961 Act was completed in record time.
Simplified Income Tax Rules and redesigned return forms will be notified shortly.
These changes aim to make compliance easier for ordinary citizens, reducing difficulty in filing returns.
No new tax burdens or rate increases for salaried individuals are introduced under this transition.
Sitharaman did not make any modifications to Income Tax slabs, rates, standard deduction, or rebates for salaried employees. The take-home pay for those in the new tax regime (the default for most) will remain unchanged.
Union Budget 2026: Indirect relief measures for salaried and middle-class families
Several targeted proposals provide cash-flow ease:
TCS rationalisation under the Liberalised Remittance Scheme (LRS): TCS on remittances for education and medical purposes reduced from 5 per cent to 2 per cent.
TCS on overseas tour packages reduced from 5-20 per cent to a uniform 2 per cent (without any minimum threshold).
Exemption for motor accident claims: Any interest awarded by the Motor Accident Claims Tribunal to a natural person is exempt from income tax, with no TDS applicable.
Compliance ease: A rule-based automated process is proposed for small taxpayers to obtain lower or nil TDS certificates without filing applications with the assessing officer.
Other procedural relief: Rationalisation of penalty and prosecution provisions to reduce litigation and fear of criminal action for minor or procedural lapses.
These measures focus on easing upfront outflows for families funding overseas education/medical needs or travel, while simplifying TDS processes.
Salaried taxpayers can expect predictability in direct tax liability - no surprises on slabs or rates. The emphasis is on making the system simpler and less burdensome through the new Act and targeted TCS/TDS reliefs.
With the New Income Tax Act launching next April, expect clearer rules and easier ITR filing in the coming years.
