Union Budget 2026: FM Sitharaman Cuts TCS Rates To 2% On Liquor, Scrap, Minerals And Tendu Leaves
FM Nirmala Sitharaman's Union Budget 2026 cuts TCS rates from 5% to 2% on liquor, scrap, minerals, tendu leaves
Union Finance Minister Nirmala Sitharaman on Sunday presented her ninth consecutive Union Budget, shifting attention immediately to how the proposals will impact everyday taxpayers and consumers. While no changes were announced in the income tax slabs or tax regimes, Budget 2026 introduced significant relief through rationalisation of Tax Collected at Source (TCS) rates and simplification of compliance norms.
The latest Budget places strong emphasis on easing cash-flow pressures, reducing upfront tax burdens and offering greater flexibility in return filing, particularly for salaried individuals, small taxpayers and families with overseas expenses.
TCS Rates Cuts 2% on Liquor, Scrap, Minerals and Tendu Leaves
One of the key highlights of Budget 2026 is the reduction in TCS rates across several categories. The government has proposed lowering TCS on overseas tour programme packages to a flat 2 per cent, replacing the earlier higher rates and removing the minimum amount threshold. This change is expected to make international travel more affordable by reducing the upfront tax burden on travellers.
In addition, TCS on the sale of specific goods such as alcoholic liquor, scrap and mineral products has been rationalised to 2 per cent. The rate on tendu leaves has also been lowered from 5 per cent to 2 per cent, offering relief to traders and sellers in these sectors.
Relief has also been extended to families remitting money abroad for education and medical treatment. Under the Liberalised Remittance Scheme (LRS), TCS for education and medical purposes has been reduced from 5 per cent to 2 per cent, easing financial pressure on households funding overseas studies or healthcare.
Income Tax Return Deadlines and Compliance Changes
Budget 2026 continues with the existing deadlines for filing income tax returns for salaried taxpayers. The due date for ITR-1 and ITR-2 will remain July 31, providing consistency and certainty for individual taxpayers.
The government has also extended the window for revising income tax returns. Taxpayers will now be able to revise their returns up to March 31 instead of December 31, subject to payment of a nominal fee. This extension allows individuals additional time to rectify mistakes or omissions.
For non-audit business cases and trusts, the return filing deadline has been extended to August 31, offering more flexibility to these categories.
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