The Economic Times

Indian businesses in the UAE and Gulf region largely welcomed the Union Budget 2026-27, commending initiatives like India Semiconductor Mission 2.0 and the SME Growth Fund. While some praised the focus on manufacturing and digital transformation, others called for greater emphasis on welfare schemes. The budget signals India's commitment to becoming a stable, policy-forward digital economy.

The Finance Bill 2026 introduces retrospective amendments to the Income-tax Act, 1961, addressing key court rulings. These changes clarify time limits for transfer pricing assessments, validate the jurisdiction of Jurisdictional Assessing Officers for reassessment notices, and protect assessment orders from invalidity due to DIN quoting errors, effective from 2009 and 2021 respectively.

Budget 2026 clarifies that assessment orders under the Income Tax Act will not be invalidated due to mistakes or omissions if a Document Identification Number (DIN) is lawfully generated and quoted.

The Union Budget proposes to restrict capital gains tax exemption on Sovereign Gold Bonds (SGBs) to individuals who subscribe at original issue and hold until maturity. This change, impacting secondary market buyers, aims to align tax benefits with the initial investment scheme and incentivize long-term participation.

Marginal relief offers a tax benefit for resident individuals in the new regime with income just over Rs 12 lakh. This provision ensures their tax payable doesn't exceed the income earned above the Rs 12 lakh threshold, effectively capping their tax liability. For instance, an income of Rs 12.10 lakh results in a tax of only Rs 10,000.

The Budget adopts a measured approach to personal taxation, prioritising structural improvements over immediate tax relief. Through legislative overhaul, procedural simplification and enforcement rationalisation, the Budget lays the groundwork for a more predictable and citizen-friendly tax framework for individuals.

Investors can now submit Form 15G/H directly to depositories to avoid excess TDS on dividend, interest from securities, and mutual fund income. This simplification, effective April 1, 2027, aims to reduce compliance burdens for eligible individuals and HUFs. The new rule allows a single submission for securities held in dematerialized form.

The Budget 2026 hike in Securities Transaction Tax is expected to reduce arbitrage fund returns by about 0.5% next year, according to Capitalminds Deepak Shenoy. While retail investors may see limited impact, arbitrage funds and foreign portfolio investors could face higher costs in futures trading.

The Finance Minister Nirmala Sitharaman, in her budget 2026 speech, announced to raise the STT on Futures to 0.05% from the present 0.02%. STT on options premium and exercise of options are both proposed to be raised to 0.15% from the present rate of 0.1% and 0.125%, respectively.

Budget 2026 introduces some reforms for senior citizens, including streamlined online customs declarations and duty exemptions on 17 cancer drugs and medicines for rare diseases. While no major new tax relief is announced, existing benefits like higher exemption limits and TDS thresholds remain. The Biopharma Shakti initiative aims to reduce long-term healthcare costs.

Budget 2026 has increased Securities Transaction Tax (STT) on futures and options trading to curb excessive retail speculation. Effective April 1, 2026, STT rates on options will rise by up to 50%, and on futures by 150%. This move, alongside SEBI's measures, aims to make high-frequency trading less viable for retail investors.

Budget 2026 introduces significant changes to income tax filing from April 1, 2026. Revised ITR forms will simplify compliance. The deadline for revised ITR filing moves to March 31. Share buybacks will be treated as capital gains for most shareholders. Updated returns for losses will be permitted. A new automated process for nil deduction certificates is coming.

While it was hoped that Budget 2026 clarifies the tax position for debt mutual funds by taxing them at a special rate instead of slab rate, this did not happen. So the capital gains tax rate as applicable last year is now applicable the same for FY 2026-27.

Section 440 of the new Income Tax Act, 2025, is being amended to extend immunity from penalties and prosecution to cases involving income misreporting. This change, effective April 1, 2026, requires taxpayers to pay an additional income-tax of 100% or 120% in lieu of penalties, aiming to reduce litigation and compliance burdens.

Budget 2026 introduces penalties for crypto exchanges failing to accurately report transactions. A Rs. 200 per day penalty will be levied for non-furnishing statements, while Rs. 50,000 will be charged for inaccurate information or failure to correct it. These provisions aim to ensure compliance and deter non-reporting, taking effect from April 1, 2026.

Budget 2026 introduces significant relief for salaried and middle-class taxpayers, including a new simplified Income Tax Act and automated NIL deduction certificates. Key changes also encompass tax exemptions on motor accident claims, rationalized TCS rates, and an extended deadline for revised ITR filings, aiming to ease compliance and financial burdens.

Budget 2026 brings key changes for taxpayers. The income tax return correction window extends to March 31. TDS and TCS rules are simplified, easing compliance and cash flow. Litigation and penalties are softened with reduced pre-deposits. Corporate tax sees MAT reduction and STT increases. A foreign asset disclosure window offers a compliance route for small taxpayers.

Taxpayers can now assess the break-even points for the old and new tax regimes. The Union Budget 2026 has confirmed both systems will continue. This analysis helps individuals decide which tax structure offers greater savings based on available deductions. Understanding these points is crucial for optimizing tax liability for Assessment Year 2027-28.

Budget 2026 did not make any new Pradhan Mantri Awas Yojana (PMAY) announcements, though the scheme had received Rs 54,500 crore for its urban component (PMAY-U) in the Union Budget 2024-25. PMAY-U 2.0 continues to provide central assistance for affordable housing in urban areas to eligible families, with specific criteria for participation and beneficiary eligibility.

Most anticipated change in Budget 2026 was change in Section 87A tax rebate. Currently Section 87A tax rebate depends on the chosen tax regime. The new income tax regime offers Section 87A tax rebate of up to Rs 60,000 which makes zero tax for income up to Rs 12 lakh. Similary under old tax regime offers 87A tax rebate up to Rs 5 lakh income. This rebate is exclusively for resident individuals, excluding HUFs, NRIs, companies, and super senior citizens. Certain capital gains and incomes taxed at

Finance Minister Nirmala Sitharaman's Budget 2026 speech brought no changes to debt mutual fund taxation, maintaining taxation at slab rates. Recent amendments, particularly from Budget 2024, reduced the holding period for long-term capital gains from 36 months to 24 months for specified debt funds, impacting tax outgo for higher tax brackets.

Finance Minister Nirmala Sitharaman's Budget 2026 proposes a 50% reduction in import tariff rates for personal goods, from 20% to 10%. This change aims to rationalize customs duties, potentially saving consumers significant amounts on imported items. An example calculation shows a substantial decrease in total duties and taxes for an imported air conditioner.

Finance Minister Nirmala Sitharaman's Budget 2026 maintained existing taxation rules for gold and silver investments, with no changes announced for capital gains. The budget confirmed that GST and capital gains tax structures for physical, digital, ETFs, and mutual funds remain as previously established.

NPS subscribers hoping for an 80% tax-free lump sum withdrawal will have to wait. Finance Minister Nirmala Sitharaman's Budget 2026 speech on February 1, 2026, did not announce an increase from the current 60% limit for non-government subscribers. This means 20% of the NPS corpus may still be taxable upon withdrawal.

NPS subscribers hoping for more tax benefits from Budget 2026 were disappointed. Finance Minister Nirmala Sitharaman's speech on February 1, 2026, offered no new tax advantages. The new tax regime only allows tax benefits on employer contributions to NPS. Individual and self-contributions receive no tax relief under this regime.

Union Budget 2026 will allow Non-Resident Indians to invest in Indian equities via the Portfolio Investment Scheme, increasing individual limits to 10% and overall PROI limits to 24%. This move is expected to significantly impact equity markets, while AIFs and REITs are unlikely to be affected due to their existing tax advantages.

The Union Budget 2026 has maintained the Employees' Provident Fund (EPF) wage ceiling at Rs 15,000, a limit unchanged since 2014. Experts highlight that an increase would have significantly boosted retirement savings for employees, especially younger ones, through long-term compounding. While beneficial for workers, a higher ceiling could increase payroll costs for employers, particularly MSMEs.

All senior citizens aged 70 and above will receive continue to receive health coverage up to Rs 5 lakh annually. This benefit is available irrespective of income. Aadhaar is mandatory for enrollment. Eligible individuals can apply online or via the Ayushman App.

Budget 2026 maintains the PM Kisan beneficiary amount at Rs 6,000 annually. This financial aid is disbursed in three Rs 2,000 installments. Farmers can check their status online and complete mandatory eKYC. Several reasons can lead to rejection, including duplicate names and incomplete KYC. Certain categories like income tax payers are ineligible.

The Black Money Act, 2015, imposes penalties and prosecution for wilful non-disclosure of foreign income and assets. Amendments are proposed to sections 49 and 50 to exempt minor and inadvertent non-disclosures from prosecution, aligning them with the existing penalty framework.

The Finance Minister maintained the standard deduction at Rs 75,000 for salaried individuals and pensioners under the new tax regime in Budget 2026. This deduction, available without proof, reduces taxable income, making individuals earning up to Rs 12.75 lakh tax-free due to the Section 87A rebate.

Union Budget 2026 proposes to tax buy-back for all types of shareholders as capital gains. However, to disincentivize this use of tax arbitrage, promoters will pay an additional buyback tax. As a result, this will make the effective tax 22% for corporate promoters. For non-corporate promoters, the effective tax will be 30%.

Union Budget 2026 highlights the new tax regime's advantage for salaried individuals. Lower tax rates under the new system offer significant savings compared to the old regime. While the old tax regime remains for specific cases like housing loan interest, the new regime is becoming the mainstream. This shift focuses on simplicity and reduced tax liability for most taxpayers.

Income Tax Slabs FY 2026-27 New Regime vs Old: The Finance Minister unveiled the Union Budget 2026. However, salaried and middle class looked for any relief in the income tax slabs for the upcoming financial year 2026-27. Currently, the highest tax rate of 30% is applicable if the taxable income exceeds Rs 24 lakh and income is exempted up to Rs 4 lakh in financial year in the new tax regime.

Budget 2026: Finance Minister Nirmala Sitharaman announced new tax benefits in Budget 2026. Inter cooperative society dividend income will be deductible if distributed to members.

Prepayment quantum is reduced to 10% on core tax demand to curb litigation. Taxpayers can now update returns even after reassessment begins, with an additional 10% tax. Assessing officers will solely use these updated returns, building on existing immunity frameworks for underreporting.

Tax Deducted At Source (TDS) process is being simplified for NRI property sellers.

Finance Minister Nirmala Sitharaman has proposed extending the deadline for revising income tax returns from December 31 to March 31, allowing for a nominal fee. This change aims to address issues faced by taxpayers, particularly those with foreign income, by better aligning Indian tax timelines with global practices and reducing disputes.

Finance Minister Nirmala Sitharaman unveiled a new scheme for small taxpayers. This initiative will allow them to get lower or nil tax deduction certificates through an automated process. The Income Tax Department will manage this rule-based system. This aims to ease the process for taxpayers holding securities in multiple companies.

Union Budget 2026 has proposed that any interest awarded by the Motor Accident ClaimsTribunal to a natural person will be exempt from income tax for the financial year 2026-2027.

A new scheme will allow small taxpayers to declare undeclared foreign assets. This one-time offer covers income or assets up to one crore rupees. Those eligible will pay 30% of the fair market value or undisclosed income. This payment includes tax and penalty. Participants will gain immunity from prosecution.

Significant tax relief is on the horizon for overseas travel, education, and medical expenses. The government plans to slash the TCS rate on tour packages to a flat 2%, removing existing thresholds. Furthermore, remittances for education and medical needs under the Liberalised Remittance Scheme will also see a reduction to 2%.

Middle-class taxpayers hoping for tax relief in Budget 2026 were left wanting, as no new concessions were announced. Existing benefits under the new tax regime, including a Rs 75,000 standard deduction and employer NPS contributions, remain. Key expectations like increased standard deduction and higher home loan interest deductions were unmet, leaving many disappointed.

Equity mutual funds have shown strong performance since the last budget on February 1, 2025. Approximately 16 funds delivered over 20% returns. Sectoral and thematic funds, including international, energy, and banking sectors, led the gains. Nippon India Taiwan Equity Fund topped the list with a 61.40% return.

DA, DR hike for employees and pensioners: Central government employees and pensioners are set to receive a 2% Dearness Allowance (DA) and Dearness Relief (DR) hike each in January 2026, bringing the total to 60%. This adjustment is based on the December 2025 All India Consumer Price Index-Industrial Workers (AICPI-IW) data. The government may announce this hike in March 2026.

A man who sold agricultural land for Rs 5 crore and reinvested the gains into a new plot in his wife's name was denied capital gains tax exemption under Section 54B. The Income Tax Appellate Tribunal (ITAT) Delhi upheld this denial, citing a Punjab and Haryana High Court ruling that disallows deductions when the new land isn't purchased in the assessee's own name.

A man who sold agricultural land for Rs 5 crore and reinvested the gains into a new plot in his wife's name was denied capital gains tax exemption under Section 54B. The Income Tax Appellate Tribunal (ITAT) Delhi upheld this denial, citing a Punjab and Haryana High Court ruling that disallows deductions when the new land isn't purchased in the assessee's own name.

While Budget 2026 may further accelerate Indias AI journey, Tax leaders can stay ahead to turn Tax complexity into insights, clarity and control

Gold and silver ETFs experienced a sharp decline following a significant selloff in precious metals, with spot gold falling 5.4% and silver dropping 10.7%. This correction was attributed to a strengthening US dollar and profit-booking after a strong January rally. Experts advise caution due to near-term volatility but maintain a bullish long-term outlook.