THINGS INDIVIDUAL TAXPAYERS SHOULD KNOW

THINGS INDIVIDUAL TAXPAYERS SHOULD KNOW 

TIMES OF INDIA 02.02.2026

The slab rates for individuals under both the old and new tax regimes remain unchanged, with no modifications being proposed to education cess and surcharge either. 

The New Income Tax Act, 2025 will come into effect from April 1, 2026. The FM has announced that forms and rules will be notified soon to provide clarity and ease of compliance. 

The return filing timelines for individuals have now been staggered. ITR-1 and ITR-2 filers retain the July 31 deadline. Individuals with non-audit business income and trusts can now file their returns till Aug 31. 

The tax collected at source (TCS) rates on overseas tour packages will be reduced to a uniform 2% (irrespective of the amount), replacing the 5% and 20% rates. Further, TCS on self-financed foreign education and overseas medical treatment above 10 lakh will also be reduced from 5% to 2%. 

A one-time, six-month Foreign Asset Disclosure Scheme has been introduced for small taxpayers such as students, professionals, tech employees and returning or relocating individuals. 

Category A – Allows those with undisclosed foreign income or assets valued up to 1 crore, to regularise them by paying 30% of fair-market value of assets, or 30% of undisclosed income, plus 30% in lieu of penalty, with immunity from prosecution.

Category B – Allows those who paid taxes but failed to report related foreign assets valued up to 5 crore, to regularise such assets by paying a 1 lakh fee, with full immunity from penalty and prosecution. Individuals who failed to disclose foreign non-immovable assets valued below 20 lakh will receive immunity from prosecution. This is applicable retrospectively from Oct 1, 2024. For sale of immovable property involving non-residents, resident buyers can deduct and deposit tax deducted at source (TDS) using PAN-based challan, removing the need for a TAN and thus simplifying compliance. For small taxpayers, a fully automated, rule-based approval for nil or lower TDS certificates will be introduced, eliminating the need for any interaction with tax officers and ensuring faster processing. Individuals who are persons resident outside India (PROIs) are now permitted to invest in listed Indian equity through the Portfolio Investment Scheme (PIS), with the individual limit increased from 5% to 10% and the overall cap for PROIs raised from 10% to 24%. 

In a move aimed at attracting global talent, exemption on foreign-sourced income for experts visiting India for up to five years has been granted. To qualify, the individual must have been a non-resident for the previous five years, provide services under a govt-notified scheme and satisfy other conditions as may be prescribed.