Amnesty for Small Oversights: FM Announces One-Time Foreign Asset Disclosure Window
The Budget also provided relief to taxpayers in the form of TCS cuts on foreign travel and money sent abroad for education
Mumbai: Even as the Union Budget 2026 did not directly tinker with income tax slabs, the finance minister Nirmala Sitharaman announced multiple measures to ease compliance for taxpayers such as extending the period of filing revised returns, rationalisation of TDS and TCS provisions, besides decriminalising some prosecution and penal provisions.
A new Income Tax Act will replace the decades old 1961 law from April 1, 2026. The ITR forms such as ITR-1 and ITR-2 will be redesigned to make filing easier for individuals. While the standard filing deadline for these returns remains July 31, taxpayers can now file revised returns up to March 31, instead of the earlier December 31 deadline. For non-audit business cases and trusts, the window for filing returns has been extended to August 31, offering greater flexibility in meeting annual tax obligations.
The Budget also provided relief to taxpayers in the form of TCS cuts on foreign travel and money sent abroad for education.
The government also cut the Tax Collected at Source (TCS) rate under the Liberalised Remittance Scheme (LRS) from 5 percent to 2 percent for remittances made for education and medical purposes above Rs 10 lakh.
The Liberalised Remittance Scheme permits residents of India to remit up to USD 250,000 per financial year outside the country towards approved personal use. These are education, travelling, health services, presents, and investments.
Similarly, the TCS has been rationalized on sale of overseas tour program package to 2 per cent (from current 5% & 20%).
Dividend Deduction Ease ➢ Single window filing with depositories for Form 15G or Form 15H for TDS on dividends, interest etc.
The Finance Minister Nirmala Sitharaman also proposed a one-time six-month foreign asset disclosure scheme aimed at addressing the practical difficulties faced by small taxpayers, including students, young professionals, tech employees, relocated NRIs, and others. The proposed window will allow eligible taxpayers to voluntarily disclose overseas income or assets below a specified threshold, offering relief to those who may have unintentionally failed to report such holdings due to compliance challenges.