What are the significant announcements in Budget 2026?
Synopsis
As the Union Budget 2026-27 approaches, the Finance Ministry highlights key announcements and progress achieved under the Finance Act 2025. Key reforms in taxation aim to benefit both individuals and corporations, promising a more efficient and equitable tax structure.
Key Takeaways
Significant tax reforms introduced under the Finance Act 2025.
New tax regime allows for greater taxpayer relief.
Corporate tax rate adjustments to encourage investment.
Infrastructure investment incentives for SWFs and Pension Funds.
Commitment to certainty of taxation for AIFs.
New Delhi, Jan 20 (NationPress) As the government prepares for the unveiling of the Union Budget 2026-27 on February 1, the Finance Ministry has provided insights into the impactful Budget announcements and the advancements achieved thus far.
The Finance Act 2025 has implemented extensive modifications to the Personal Income Tax framework under the New Tax Regime (NTR), ensuring that taxpayers retain a greater share of their earnings.
According to a post on X, these modifications will be in effect starting from FY 2025-26 (AY 2026-27).
The Income Tax Bill, 2025 signifies a pivotal change as it seeks to overhaul India’s outdated direct tax system, aiming to achieve a balance between fostering investor confidence, providing relief to taxpayers, and enhancing administrative efficiency through the new legislation.
Reforms in the tax policy encompass corporate taxation, with a set rate of 22 percent for companies that opt not to utilize specific deductions and exemptions, along with a 15 percent rate for new manufacturing firms for a designated period. For individual taxpayers, the new regime introduces more favorable slabs and lower rates with increased rebates, allowing individuals earning up to Rs 12 lakh (effectively Rs 12.75 lakh for salaried individuals due to a standard deduction of Rs. 75,000) to avoid tax altogether.
The Finance Act 2025 has also expanded the benefits under Section 10 (23FE). Now, eligible Sovereign Wealth Funds (SWFs) and Pension Funds can make qualifying infrastructure investments until March 31, 2030, while still enjoying tax exemptions on dividends, interest, and long-term capital gains, as highlighted by the ministry.
Additionally, the Finance Act 2025 has fully implemented further activities and deadline extensions for the International Financial Services Centre (IFSC), with amendments that took effect on April 1, 2025.
“The government has honored its Budget commitment to deliver ‘certainty of taxation’ for Alternative Investment Funds (AIF) by clarifying their income classification from securities,” the ministry stated.
Furthermore, the Finance Act 2025 has completely realized additional activities and deadline extensions for the International Financial Services Centre (IFSC), with these changes effective from April 1, 2025.
Point of View
The recent reforms reflect a strategic shift towards a more taxpayer-friendly approach while fostering investor confidence. The Finance Ministry's commitment to enhancing administrative efficiency and encouraging infrastructure investments demonstrates a forward-thinking approach to economic policy.
NationPress
10 May 2026
Frequently Asked Questions
What changes were introduced in the Finance Act 2025?
The Finance Act 2025 introduced significant reforms in the Personal Income Tax structure under the New Tax Regime, including more favorable tax slabs and increased rebates for individual taxpayers.
How will the new tax regime affect individual taxpayers?
Individuals earning up to Rs 12 lakh will not be required to pay taxes under the new regime, effectively allowing for greater disposable income.
What are the benefits for Sovereign Wealth Funds and Pension Funds?
SWFs and Pension Funds can invest in qualifying infrastructure projects until March 31, 2030, while enjoying tax exemptions on dividends, interest, and long-term capital gains.
When will the new tax policies take effect?
The new tax policies will be effective from FY 2025-26, which corresponds to AY 2026-27.
How does the Finance Act 2025 impact corporate taxation?
The Act sets a corporate tax rate of 22% for companies that do not claim specific deductions, while new manufacturing companies benefit from a 15% rate for a limited period.
