Budget Expectations 2026: The government has begun preparations for the 2026 budget, and industry organizations have submitted their recommendations to the Revenue Secretary. Industry organizations have stated that corporate taxes should be reduced along with personal income tax slabs.
With just three months left before the next budget is presented, the government has begun preparations, and the industry has begun consulting on the budget. Meanwhile, the industry organization PHD Chambers of Commerce (PHDCCI) has urged the government to provide further income tax relief to the common man. The industry organization has stated that individual taxpayers earning up to ₹50 lakh annually should receive tax rate relief.
If the government heeds the industry association’s demands, income up to ₹50 lakh per annum could become tax-free. The industry association has urged that the 30% rate applicable under the new tax regime be increased to apply to incomes above ₹50 lakh. Currently, the 30% slab applies to taxpayers earning more than ₹24 lakh per annum. The industry association has submitted its recommendations to Revenue Secretary Arvind Srivastava. It has also suggested some changes to indirect taxes.
Demand for reduction in corporate tax:
Finance Minister Nirmala Sitharaman will present the budget on February 1st next year. Prior to this, PHDCCI has recommended reducing corporate tax below 25%, along with that for individual taxpayers. The industry body stated that the corporate tax, which was previously 35%, has now been reduced to 25%. This has also led to an increase in tax collection from ₹6.63 lakh crore in 2018-19 to ₹8.87 lakh crore. This is a significant growth, and further reductions could further encourage companies to pay taxes.
The industry body stated that the current highest personal tax rate is 30%, with a 5% to 25% surcharge. This translates to a tax rate of 39% in some cases. It’s incredibly stressful that 40% of a person’s income goes to the government, leaving 60% for expenses. The organization stated that the maximum tax rate should be 20% for incomes up to ₹30 lakh, and 25% for incomes between ₹30 and ₹50 lakh. A 30% tax should only be imposed when annual incomes exceed ₹50 lakh.
The PHD Chamber of Commerce has argued that to promote manufacturing in the country, Section 115BAB of the Income Tax Act should be amended, providing tax relief to new enterprises. The initial income tax rate should not exceed 15%, subject to a surcharge. The government implemented this tax rate in September 2019 and extended it until March 31, 2024. However, this tax rate should be retained. This will significantly encourage foreign companies to manufacture in India.
We have taken all measures to ensure that the information provided in this article and on our social media platform is credible, verified and sourced from other Big media Houses. For any feedback or complaint, reach out to us at businessleaguein@gmail.com
Add businessleague.in as a Preferred Source
