Archive · 27 Jan 2026
Budget 2026: Tax Changes and Business Demands
The Indian government is expected to make big changes to taxes in the upcoming Budget 2026.
Business leaders want lower taxes for manufacturing and special incentives for different industries.
They also want simpler tax rules and better ways to solve disputes.
For regular people, the government might increase the tax rebate to cover incomes up to Rs 12 lakh, meaning no tax for many.
Investors hope the government will lower the tax on long-term stock gains, which could make more people invest in the stock market.
These changes aim to make taxes easier and help the economy grow.
Section 87A rebate expanded to cover incomes up to Rs 12 lakh under the new tax regime for FY 2025-26.
Business leaders demand targeted tax incentives and a lower tax rate for manufacturing.
50% of respondents want sector-specific incentives, and 34% want the return of the 15% tax rate for manufacturing.
Investors hope for LTCG tax rationalization, including a lower tax rate and increased exemption limit.
Simplification of tax compliances and dispute resolution mechanisms are also major demands.
- Who
- Indian business leaders, taxpayers, and investors
- What
- Demands for tax incentives, LTCG rationalization, and simplified tax regime
- When
- Anticipation of Union Budget 2026
- Where
- India
- Why
- To boost economic growth, simplify tax laws, and enhance market sentiment
- Rebate Threshold (New Regime)
- Rs 12 lakh
- Rebate Threshold (Old Regime)
- Rs 5 lakh
- Maximum Tax Payable Before Cess
- Rs 60,000
- Health and Education Cess
- 4%
- Eligible Taxpayers
- Resident individuals
- Excluded Incomes
- Short-term/long-term capital gains, mutual funds, lottery winnings
- Effective Date
- Financial Year 2025-26
- Manufacturing Tax Rate (Old)
- 15%
- LTCG Tax Rate (Current)
- 12.5%
- LTCG Exemption Limit (Current)
- ₹1.25 lakh
Sources
Union Budget 2026: How FM Nirmala Sitharaman tweaked Section 87A in 2025 and reshaped rebate mechanism
Budget 2026: How could LTCG tax rationalisation impact Indian stock market sentiment?
Budget 2026: India Inc Seeks Manufacturing Tax Relief, Sector-Specific Incentives And Simpler Tax Regime
