Budget 2026: IT Services Get Major Boost with New Safe Harbour Rules

• Finance Minister Nirmala Sitharaman announced a significant overhaul of the transfer-pricing Safe Harbour regime in Budget 2026.
• The eligibility threshold for Safe Harbour was raised from ₹300 crore to ₹2,000 crore, benefiting mid-sized and larger IT service providers.
• All IT services categories, including software development and KPO, are now under a single Safe Harbour category with a uniform margin of 15.5%.
• Industry experts like Promod Batra and Tarun Arora of Deloitte India praised the move for reducing litigation and improving ease of doing business.
• The approval process for Safe Harbour compliance will become automated and rule-based, eliminating tax officer examination.

Why It Matters: Budget 2026 simplifies Safe Harbour for IT services, raising eligibility and streamlining processes to boost growth.