7 ways income tax filing will be impacted after Budget 2026

Budget 2026 has not made any changes in income tax slabs but has reiterated that the Income Tax Act will come into effect from April 1, 2026. As the new Income Tax Act comes into effect, here is how it will impact your ITR filing this year.

When will new ITR forms be notified?

According to the Budget Speech, the New Income Tax Act will take effect on April 1, 2026 and simplified income tax regulations and forms will be announced soon. The paperwork has been revised to make it easier for regular people to comply with it.

Is the revised ITR filing deadline extended?

The deadline to file revised ITR has been proposed to be extended from December 31 to up to March 31 with the payment of a nominal fee.

Is there a change in ITR filing deadline for individuals?

FM has made no modifications to the filing of tax returns for persons with ITR 1 and ITR 2, which will continue to be July 31. However, non-audit business cases or trusts will now be allowed to file returns until August 31.

Share buyback to be treated as capital gains

Budget 2026 proposes a change in the taxation of buybacks for all types of shareholders as capital gains. However, to discourage the use of tax arbitrage, promoters will pay an extra buyback tax. This will result in an effective tax rate of 22% for business promoters. For non-corporate promoters, the effective tax rate will be 30%.

Changes in Updated Return in case of losses

Budget 2026 has proposed to allow filing of Updated Returns if the taxpayer reduces the loss amount vis-a-vis loss amount claimed in original ITR. The proposed change will come into effect from April 1, 2026. The amendment will be applicable in both old and new income tax act.

Automated process to apply for NIL deduction certificate

A new scheme has been announced where small taxpayers will be issued a nil-deduction certificate through a rule-based automated process by the Income Tax Department.

Foreign assets disclosure scheme

The government has announced a one-time 6-month foreign asset disclosure scheme for small taxpayers like students, young professionals, tech employees, relocated NRIs, and such others to disclose income or assets below a certain size.