Archive · 23 Jan 2026
Budget 2026 to simplify TDS framework
The Indian government is planning to simplify the Tax Deducted at Source (TDS) system in the upcoming Budget 2026.
TDS is a big part of the country's tax collections, making up about 42% of the total.
The current system is quite complex, which causes problems for businesses like cash-flow issues and difficulties in following the rules.
The government has already started making changes, like increasing the threshold for TDS on rent from Rs 2.4 lakh per year to Rs 50,000 per month.
These changes aim to make the system easier to understand and follow, which should help businesses manage their money better and comply with the tax rules more easily.
Industry leaders are also calling for further rationalisation of TDS and TCS provisions to reduce compliance friction and enhance transparency.
The Budget 2026 is expected to be presented on 1 February 2026, with key sectors like railways, infrastructure, and renewable energy likely to receive allocations.
The Union Budget 2026 will be presented by Finance Minister Nirmala Sitharaman on 1 February 2026.
Industry leaders are calling for the rationalisation of TDS and TCS provisions to reduce compliance friction and enhance transparency.
The threshold for TDS on rent has been increased from Rs 2.4 lakh annually to Rs 50,000 monthly.
Key sectors to watch out for in Budget 2026 include railways, infrastructure, urban development, manufacturing, auto, defense, electronics, MSME, renewable energy, and AI.
Proposed tax reforms include a new tax slab of 25% on net incomes between ₹30 lakh and ₹50 lakh and raising standard deductions for salaried employees to ₹1 lakh.
- Who
- Government of India and Industry Leaders
- What
- Simplification of the TDS framework and other tax reforms
- When
- Upcoming Budget 2026 on 1 February 2026
- Where
- India
- Why
- To ease cash-flow pressures, improve compliance for businesses, and support innovation-led sectors
Industry Leaders
Government
TDS and TCS Rationalisation
Industry Leaders
Industry leaders advocate for reducing TDS on crypto transactions from 1% to 0.01% and aligning capital gains tax with income tax slabs to improve compliance and investor confidence.
Government
The government is considering simplifying TDS and TCS provisions to reduce compliance friction and enhance transparency.
- Budget Presentation Date
- 1 February 2026
- Budget Session Commencement
- 28 January 2026
- Economic Survey Presentation
- 31 January 2026
- First Half of Budget Session Ends
- 13 February 2026
- Second Half of Budget Session Begins
- 9 March 2026
- Final Day of Budget Session
- 2 April 2026
- Key Sectors for Allocation
- Railways, infrastructure, urban development, manufacturing, auto, defense, electronics, MSME, renewable energy, AI, healthcare, tourism, agriculture, and logistics
- Proposed New Tax Slab
- 25% on net incomes between ₹30 lakh and ₹50 lakh
- TDS Contribution
- 42% of total tax collections
- Current Threshold for TDS on Rent
- Rs 2.4 lakh annually
- Proposed Threshold for TDS on Rent
- Rs 50,000 per month
- Impact of TDS Complexity
- Cash-flow strain and compliance hurdles for businesses
- Policy Momentum
- Recent Union Budgets focus on TDS simplification
Sources
Why Budget 2026 must simplify TDS to ease cash flow pressures
Budget 2026 expectations LIVE Updates: Industry has high expectations of FinMin Nirmala Sitharaman's ninth Budget speech
Budget 2026: Experts call for fair tax measures and TDS, TCS rationalisation
