On 1 February 2026, the Union Budget was presented by Nirmala Sitharaman. Budgets often read like long legal documents — here’s a short, plain-English summary of the changes most people will notice, why they matter, quick actions you can take — and how we can help.
1) Lower TCS on some overseas education & medical transfers ✈️💸
What changed: TCS on LRS remittances for education & medical treatment has been cut 5% → 2% for qualifying transfers.
Why it matters: Less tax withheld at the time of transfer → smaller immediate cash outflow.
What to do:
✅ Check the TCS your bank will apply before a large remittance.
🧾 Keep receipts & bank statements for tax filing or credit claims later.
How we can help: our team can quickly check the documentation you need, confirm whether your remittance qualifies for the 2% rate, and provide a short checklist you can share with your bank to avoid surprises.
2) MAT for companies — simpler and slightly lower 🏢📉
What changed: MAT is now final tax and rate reduced 15% → 14%, effective 1 Apr 2026. Transition rules limit carried-forward MAT credit.
Why it matters: Impacts company tax planning, investor returns, and reported tax in financials.
What to do (if you run a company):
📊 Ask your tax advisor to re-run FY 2026–27 tax projections.
🗂️ Update financial plans and board papers if required.
How we can help: we can re-run your tax projections, model the impact on profit after tax and investor returns, and prepare clear board / investor notes showing the changes and suggested actions.
3) One-time foreign-asset disclosure window 🌍🔓
What changed: A limited window lets some taxpayers declare previously undisclosed foreign income/assets under prescribed terms.
Why it matters: A chance to regularize missed foreign-account/investment reporting without harsher exposure.
What to do:
🤝 If you (or family) have unreported foreign holdings, consult a tax professional confidentially.
⚠️ Don’t guess — get expert advice before using the disclosure window.
How we can help: we offer a confidential assessment (document review + tax exposure estimate) and can prepare the disclosure filing if you decide to proceed — protecting compliance while minimizing cost and risk.
4) Easier corrections: revised ITRs & staggered filing deadlines 📝⏳
What changed (exact dates):
Revised ITRs: Allowed up to 31 March (nominal fee if after 31 Dec).
Staggered filing: ITR-1 & ITR-2 → 31 July; certain non-audit business returns / trusts / many ITR-3 & ITR-4 → 31 August.
Why it matters: More time to correct honest mistakes — but a small fee may apply for late revisions.
What to do:Review recent returns for missed income/deductions.
Ask your tax preparer about the nominal fee & any penalties before filing late.
How we can help: we can do a quick review of your filed return (or your tax preparer’s work) to spot missed items, prepare the revised return, and advise whether the revision is worth the nominal fee.
5) STT increase — derivatives trading just got costlier 📈⚖️
What changed (exact rates):
Futures (sale): 0.02% → 0.05%
Options (premium): 0.10% → 0.15%
Options (on exercise): 0.125% → 0.15%
Why it matters: Frequent F&O traders and high-volume strategies will see higher transaction costs.
What to do (traders):Re-calculate trading costs and adjust position sizes or frequency.
Consider lower-turnover alternatives or hedging approaches that reduce churn.
How we can help: while we don’t provide trading advice, our team can compute the exact tax/transaction cost impact on your P&L and help you understand the breakeven points for different trading frequencies or strategies.
Quick summary — who should act now ⚡
Students & families sending money abroad: Verify the new 2% TCS with your bank before transfer.
People with undeclared overseas assets: Seek confidential professional advice about the disclosure window.
Company owners / directors: Re-run tax projections — MAT = 14% (final) from 1 Apr 2026.
Active F&O traders: Update cost models — STT on derivatives has risen.
Anyone who needs to fix ITRs: Note the revised-return window to 31 March (nominal fee after 31 Dec) and staggered filing dates (ITR-1/2 → 31 July; certain ITR-3/4/non-audit returns → 31 August). Consult your CA before filing.
How C P Agrawal and Associates can help — quick, practical support
Fast checks & clarifications: short call or document review to confirm if a remittance qualifies for 2% TCS, or whether you need to revise an ITR.
Company tax help: re-run MAT projections, update financials, and prepare board notes.
Disclosure assistance: confidential assessment of foreign holdings, exposure estimate, and help filing the disclosure.
F&O cost modelling: compute the STT impact on your trading P&L so you can make an informed choice.
End-to-end filing: prepare and file revised returns, and explain any fees or potential penalties in plain English.
If you’d like, we can provide a short engagement checklist or a fixed-fee “quick review” package to handle any one of the items above.
Final word — keep it simple 😊
Most people will feel only small, practical effects: lower TCS for some overseas transfers, clearer ITR correction windows (with a March-31 revised-return window), a one-time route to disclose certain overseas assets, a simplified MAT for companies, and higher STT for derivatives traders. If you’re unsure how any change affects you, reach out for a professional guidance before making big financial moves
