Budget 2026: Sitharaman Decriminalises Non-Production of Account Books, Eases Tax Compliance

• Finance Minister Nirmala Sitharaman announced the decriminalisation of non-production of books of accounts and related documentation during her Budget 2026 speech.
• Minor offences will now attract only a fine, and remaining prosecutions will have graded penalties with a maximum of two years simple imprisonment.
• Proposed changes include extending the revision period for tax returns from December 31st to March 31st with a nominal fee.
• Tax filing deadlines will be staggered: July 31st for ITR 1 and ITR 2 individuals, and August 31st for non-audit business cases or trusts.
• Immunity from prosecution for non-disclosure of non-immovable foreign assets under Rs 20 lakh, and a six-month disclosure scheme for overseas assets/income for students and others.

Why It Matters: Budget 2026 aims to simplify tax administration, reduce litigation, and encourage compliance through decriminalisation and flexible policies.