Several hits in this budget puts ease at front and centre; focus on dispute resolution and domestic strengthening; there is no change in slab rates, surcharge, or the four per cent education cess
Railway porters watch the budget announcement at the Chhatrapati Shivaji Maharaj Terminus on Sunday. PIC/ASHISH RAJE
India’s Finance Minister Nirmala Sitharaman has delivered a budget designed to make compliance simpler, reduce avoidable friction for genuine taxpayers and signal long-range strategic intent. On the personal tax front, the headline is continuity. There is no change in slab rates, surcharge, or the four per cent education cess.
MAT’s that
The mother of all deals is Minimum Alternate Tax (MAT) for companies, which the Budget proposes to simplify materially: it reduces the MAT rate to 14 per cent and reframes MAT as a final tax rather than a rolling credit pool, stopping further MAT credit accumulation going forward. To ease the shift to the new corporate regime, it also allows set-off of brought forward MAT credit, but with a guardrail: set off is capped at one-fourth of the tax liability under the new regime.
Foreign assets
A major practical relief is aimed at students and families dealing with overseas education payments and the accidental non-disclosure of foreign bank accounts in Schedule FA. To clean up legacy, inadvertent cases, the Budget introduces a one-time voluntary disclosure window — FAST-DS 2026 — built for small, genuine taxpayers. The scheme provides a six-month disclosure window and two tracks: (1) Category A, for undisclosed foreign income/assets up to R1 crore, where the taxpayer pays 30 per cent tax plus an additional 30 per cent in lieu of penalty, with immunity from prosecution under the Black Money law; and (2) Category B, where the income was disclosed and tax paid but the asset wasn’t declared, for assets up to R5 crore, which can be regularised via a one-time R1 lakh fee with immunity from penalty and prosecution.
Pain points
On easing compliance burdens, the Budget tackles several recurring pain points. Tax collection at source (TCS) on overseas tour packages and on Liberalised Remittance Scheme (LRS) remittances for education and medical treatment is reduced to a uniform two per cent, removing the ‘cash flow tax’ effect that offered little incremental revenue gain beyond timing. Employer contribution deductions (such as towards recognised provident funds) are aligned more realistically with return filing deadlines to reduce needless litigation over minor procedural delays. For non-residents selling property in India, the buyer is no longer forced into obtaining a TAN just to deduct tax —PAN becomes sufficient, removing a completely avoidable compliance step.
No bottleneck
A noteworthy structural shift is the move toward a rule-based, automated issuance of Lower/Nil TDS certificates, leveraging historical data and the digital infrastructure expected under the Income Tax Act framework, and enabling centralised handling of Form 15G/15H by depositories. The return filing calendar is also refined to reduce last-minute congestion. ITR-1/ITR-2 due dates remain July 31, while non-audit business cases and trusts move to August 31, and the window for belated/revised returns extends to March 31 of the assessment year (with a fee after December 31).
Mardaani 3.0
Finally, the Budget continues the ‘trust-based’ tone with decriminalisation measures. It reduces the harshness of prosecutions for procedural lapses. The intention is clear: reduce adversarial proceedings and encourage voluntary compliance unless the crime is severe. The Goods and Services Tax reform arc continues, with measures meant to simplify procedures. The most significant dispute-reducer is that earlier, when services were classified as intermediary, the place of supply was treated as India (supplier location), blocking export status and refunds and triggering litigation. Now, by aligning the place of supply to the recipient’s location under the default rule, exports of services where the recipient is outside India can more cleanly qualify as zero-rated, enabling refunds of not utilised input tax credit without the same level of scrutiny.
Gambhir move
Against expectations, the Budget sharply increased Securities Transaction Tax on equity derivatives — futures from 0.02 per cent to 0.05 per cent and options to approximately 0.15 per cent with a clear objective to cool excessive speculative churn in equity futures and options. However, the Commodity Transaction Tax has not been tightened in parallel, which may create an incentive shift toward commodity derivatives. The asymmetry may need clarification to determine whether it’s deliberate policy design or an omission.
Domestic strength
Net-net, Budget 2026 leans more on compliance rationalisation, dispute reduction, and strategic sector-building — a domestic strengthening approach aimed at resilience when global trade winds feel increasingly hostile. As the world builds walls, India builds corridors.
CA Dr Mitil Chokshi is senior partner, Chokshi & Chokshi
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