Even though the middle class may not have got a big relief in the income tax slab in the General Budget 2026, the government has definitely made such changes in the tax laws, which can become a big relief for millions of taxpayers. Especially for those people who could not fully follow the tax rules due to complexity of the rules, technical lapses or lack of information. Now such mistakes can be resolved not by jail but by fine.
New Income Tax Act will change the game from 2025
Finance Minister Nirmala Sitharaman announced in the budget speech that the new Income Tax Act-2025 will come into effect from April 1, 2026. Its objective is to simplify the tax system, reduce litigation and free taxpayers from unnecessary fear. The government’s focus is now on increasing compliance rather than strict punishment.
Big relief to NRIs, hassle of selling property ends
The rules related to property sale for NRIs have been greatly simplified in the budget. Earlier, while selling property, NRIs had to obtain TAN to deposit TDS, which was a long and complicated process. Now this responsibility will be on the Indian buyer purchasing the property, who will deduct and deposit TDS through his PAN. With this, NRIs will not need to take TAN.
Relaxation on foreign asset disclosure
In Budget 2026, major relief has also been given in the rules related to foreign assets and income. NRIs who have disclosed foreign income and paid taxes but failed to declare small assets will no longer be jailed. If the total value of non-immovable property held abroad is less than Rs 20 lakh, there will be neither penalty nor any legal action for failure to disclose the same.
No more punishment for technical mistakes
The government has decided to rationalize penalties and prosecution in the direct tax regime. Now small fees will be charged instead of heavy penalties for mistakes like not getting account audit done, not submitting transfer pricing report or technical omissions in documents. No interest will be charged on the penalty amount during the appeal and the amount to be deposited for appeal has been reduced from 20% to 10%.
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