Budget 2026: ICAI Seeks Tax Reforms for Lower Litigation, Easier Compliance

• ICAI submitted a Pre-Budget Memorandum for Union Budget 2026-27, focusing on tax reforms to ease compliance and reduce litigation.
• Key recommendations include a higher surcharge threshold, deductions for medical insurance and dependents with disabilities under the new tax regime.
• The institute proposes decriminalizing certain prosecution provisions and limiting return processing to arithmetical errors to reduce litigation.
• For compliance simplification, ICAI suggests an electronic ledger for TDS, TCS, and advance tax, and allowing tax deduction based on CA certificates for non-resident payments.
• ICAI also recommends excluding F&O trading from presumptive taxation, an optional joint taxation scheme for married couples, and mandatory audits for profit-linked deductions.

Why It Matters: ICAI proposes comprehensive tax reforms for Budget 2026 to reduce litigation, simplify compliance, and promote economic growth.