Union Budget 2026: FM Proposes Major Income Tax Changes

Presenting the Union Budget 2026, the Finance Minister Nirmala Sitharaman proposed the replacement of the Income Tax Act, 1961 with a new Income Tax Act, 2025, to come into force from April 1, 2026, alongside a series of reforms to the direct-tax regime. The Finance Minister said a comprehensive review of the six-decade-old law, announced in July 2024, had been completed in record time. Simplified Income Tax Rules and new return forms will be notified shortly, with the stated objective...

Budget Proposes 14% Minimum Alternate Tax Final Levy For Companies Opting New Regime From April 2026

The Union Budget 2026–27 on Sunday proposed changes to the Minimum Alternate Tax (MAT) regime applicable to companies, to take effect from April 1, 2026, alongside the implementation of the Income Tax Act, 2025.Presenting the budget, Finance Minister Nirmala Sitharaman said, “I propose to make Minimum Alternate Tax a final tax for companies opting for the new tax regime.”She further announced a reduction in the rate, stating, “The MAT rate is proposed to be reduced to 14 per cent.”The proposal...

Union Budget 2026–27: FDI Limit In Insurance Sector Raised To 100%, Subject To Full Domestic Investment Of Premiums

The Central Government in its Union Budget of 2026, announced a major reform in the insurance sector by raising the Foreign Direct Investment (FDI) from 74 percent to 100 percent, signalling a push to attract long-term foreign capital and deepen insurance penetration in India.Announcing the measure in her Budget speech, Finance Minister Nirmala Sitharaman said:“The FDI limit for the insurance sector will be raised from 74 to 100 per cent. This enhanced limit will be available for those companies...

Budget 2026-27: Centre Proposes MCA–CBDT Panel To Integrate ICDS Into IndAS

The Union Budget of 2026 has proposed the constitution of a Joint Committee of the Ministry of Corporate Affairs and the Central Board of Direct Taxes (CBDT) to incorporate the requirements of the Income Computation and Disclosure Standards (ICDS) into the Indian Accounting Standards (IndAS)Presently, ICDS governs the computation of taxable income under the Income-tax Act, while IndAS applies to financial reporting by companies. The coexistence of two parallel frameworks has often resulted in...

Budget Proposes Hike In Securities Transaction Tax On Futures And Options

The Union Budget 2026–27 on Sunday proposed an increase in Securities Transaction Tax (STT) on futures and options trades.Presenting the Budget, Finance Minister Nirmala Sitharaman announced higher STT rates for derivative transactions. “I propose to raise the STT on Futures to 0.05 per cent from the present 0.02 per cent,” she said. The Finance Minister also proposed a hike in STT on options. “STT on options premium and exercise of options are both proposed to be raised to 0.15 per cent from...

Budget 2026-27 Proposes Revision Of Baggage Rules, Higher Duty-Free Allowances For International Travellers

The Union Budget 2026–27 on Sunday proposed changes to customs rules governing baggage clearance during international travel to address passenger concerns and align duty-free allowances with current travel patterns. Presenting the indirect tax proposals, Finance Minister Nirmala Sitharaman said, “I propose to revise provisions governing baggage clearance during international travel to address genuine concerns of passengers.” She added that the revised rules would “enhance duty-free allowances...

Budget 2026-27 Proposes Cuts On Customs Duty On Personal Imports, Exempts Cancer Drugs And Rare Disease Medicines

The Union Budget 2026–27 presented on Sunday proposed customs duty relief for personal imports and medicines used in the treatment of serious illnesses.Finance Minister Nirmala Sitharaman said, “To rationalise the customs duty structure for goods imported for personal use, I propose to reduce the tariff rate on all dutiable goods imported for personal use from 20 per cent to 10 per cent.” She also announced healthcare-specific exemptions. “To provide relief to patients, particularly those...

Union Budget 2026–27: Buyback Proceeds To Be Taxed As Capital Gains, Promoters Face Additional Levy

The Union Budget 2026–27 has introduced a significant reform in the taxation of share buybacks by shifting the tax incidence to shareholders and aligning buyback income with the capital gains framework.Under the new proposal, proceeds received by all categories of shareholders, including retail investors, institutional investors, and foreign shareholders from share buybacks will be taxed as capital gains, instead of being subject to a separate buyback distribution tax at the company level. This...

Budget 2026-27 Proposes Withdrawal Of Select Customs Exemptions, Tariff Simplification

The Union Budget 2026–27 proposed changes to India's customs duty framework aimed at simplifying the tariff structure and reducing long-standing distortions.Presenting her indirect tax proposals, Finance Minister Nirmala Sitharaman said, “To further simplify the tariff structure, support domestic manufacturing, promote export competitiveness, and correct inversion in duty, I propose to remove certain long-continuing customs duty exemptions on items which are being manufactured in India or where...

Breaking: Budget 2026–27 Keeps Income Tax Slabs And Standard Deduction Unchanged

Finance Minister Nirmala Sitharaman on Sunday presented her ninth Union Budget since taking charge in 2019, keeping income tax slabs under the new tax regime unchanged from changes made last year The income tax slabs under the new tax regime remain as follows: Income up to ₹4 lakh – Nil ₹4 lakh to ₹8 lakh – 5% ₹8 lakh to ₹12 lakh – 10% ₹12 lakh to ₹16 lakh – 15% ₹16 lakh to ₹20 lakh – 20% ₹20 lakh to ₹24 lakh – 25% Above ₹24 lakh – 30%, plus applicable cess. The standard deduction...

Budget 2026-27 Proposes Penalty Relief, Decriminalisation And Litigation Reduction In Income Tax Law

The Union Budget 2026–27 on Sunday proposed wide-ranging changes to the income tax penalty and prosecution framework, including immunity schemes, decriminalisation of certain offences and procedural measures to reduce litigation.Presenting her direct tax proposals, Finance Minister Nirmala Sitharaman said, “Multiplicity of proceedings are a hindrance to the ease of doing business.” She proposed to “integrate assessment and penalty proceedings by way of a common order for both.” The Finance...

Budget 2026-27 Proposes Sharp Cuts In TCS On Overseas Travel, Education And Medical Remittances

The Union Budget 2026–27 on Sunday also proposed significant reductions in tax collection at source (TCS) rates on overseas travel and certain foreign remittances. Presenting the direct tax proposals, Finance Minister Nirmala Sitharaman announced a cut in TCS on foreign tour packages. “I propose to reduce TCS rate on the sale of overseas tour programme packages from the current 5 per cent and 20 per cent to 2 per cent, without any stipulation of amount,” she said. The Finance Minister also...