As Union Budget 2026 approaches, tax professionals are largely united on one point: this is not the year for dramatic rate changes. Instead, they want the government to slow down, allow the new Income-tax Act to settle, and focus on fixing everyday pain points that continue to trouble taxpayers.
An tax expert, the most meaningful reform would be the absence of reform itself. “From the income tax point view, I would really like one big change from the past and that change is – That there should be no change”. he says, referring to the Income-tax Act, 2025, which was introduced only months ago and is due to take effect from April 1, 2026.
He warns that amending a law even before it comes into force would signal policy instability. In his view, the new Act does not significantly depart from the 1961 framework and has mainly streamlined language and structure. What would actually help taxpayers, he argues, is scrapping surcharges and cess and radically simplifying income tax return forms, which have grown increasingly complex over the years.
The demand for certainty runs through most expert feedback ahead of the February 1 Budget. According to another tax expert, professionals are urging the finance minister to prioritise administrative fixes rather than headline-grabbing tax cuts. He points to long-standing demands such as fewer TDS rates, simpler withholding compliance and faster dispute resolution to reduce the mounting backlog of income-tax appeals. Salaried taxpayers, he adds, are seeking higher standard deductions and clearer rules within the new tax regime.
On the corporate front, expectations are tied closely to investment and business restructuring. Another tax expert says manufacturing companies are keen on the reintroduction of concessional tax regimes to encourage new investments and job creation. He also flags gaps in the taxation of the digital economy, particularly crypto assets and derivative-based transactions, where the current framework taxes gains at 30 percent without allowing expense deductions or loss set-offs.
Litigation remains another pressure point. Another tax expert argues that simplification should translate into real relief on the ground. She calls for higher standard deductions, inflation-linked slab indexation and rationalised ESOP taxation. Faster refunds and a clear commitment against surcharge hikes or wealth taxes, she believes, are critical to restoring taxpayer confidence.
Another tax expert concerns are around complexity and transition. With the shift from the 1961 Act to the Income-tax Act, 2025, he says taxpayers need explicit grandfathering provisions covering losses, credits, incentives and pending proceedings. He also backs a reduction in penal provisions and a move away from aggressive enforcement, especially where defaults are technical rather than wilful.
For non-resident Indians, the wishlist is more granular. Another tax expert, draws attention to what he describes as a growing digital bottleneck in income tax compliance. Aadhaar-linked OTP requirements and net banking access failures have left many NRIs unable to complete return verification or receive refunds despite timely filings. He also flags unresolved issues such as double taxation of foreign retirement accounts, cumbersome TDS procedures on NRI property sales, and foreign tax credit mismatches caused by differing financial years.
Indirect tax experts are watching GST reforms closely. Another tax expert says that while GST 2.0 aims to simplify rate structures, compliance remains demanding, especially for small businesses. Expectations include stable return formats, resolution of legacy ITC mismatches, clarity on real estate-related GST issues and faster operationalisation of the GST Appellate Tribunal.
Another tax expert, highlights the lack of meaningful social security for retirees who depend largely on interest income. She calls for a separate lower tax bracket for senior citizens without pensions, clarity on taxation of systematic withdrawals from the National Pension System, rationalisation of notional rent provisions and quicker refunds, which she says are often crucial for day-to-day expenses.
The common thread across these demands is restraint. Tax experts are not asking for sweeping overhauls. They are asking for laws to remain stable, compliance to become simpler and disputes to reduce.
