Budget 2026: Bridging Old Tax Laws to New IT Act 2025 Era

• Budget 2026 is crucial as it's the last before the new Income Tax Act, 2025 (IT Act 2025) takes effect on April 1, 2026, aiming to ensure a smooth transition.
• Key expectations include rationalizing withholding tax provisions, incentivizing manufacturing (Make in India, Viksit Bharat), and promoting AI and tech sub-sectors.
• The Budget is expected to provide relaxations for entities in IFSC GIFT City, simplifying tax provisions and offering clarity on GAAR applicability.
• Reforms are sought to reduce tax litigation, rationalize penal provisions, and introduce a group tax consolidation regime to ease compliance and offset losses.
• Incentives for green projects, including concessions for green bonds and entities undertaking such projects, are also anticipated.

Why It Matters: Budget 2026 is vital for a smooth transition to the new IT Act 2025, focusing on economic growth and tax reforms.