Union Budget 2026: Balancing Revenue, Compliance, and Investment in India's Evolving Tax Framework

• India's FDI rose 19.4% to $51.8 billion in April-September 2025-26, shifting Budget 2026 focus to revenue balance and tax certainty.
• Global tax norms are resetting with OECD-led BEPS initiatives; India must align domestic tax administration without eroding investment appeal.
• Budget 2026 needs to codify profit attribution rules for PE and objective guidelines for SEP, moving from subjective to predictable thresholds.
• The Income-tax Act, 2025, replacing the 1961 Act, requires Budget 2026 to provide a procedural framework to manage transition issues and sustain investor confidence.
• Strengthening appellate capacity and simplifying the fragmented TDS regime are crucial for reducing compliance burden and enhancing tax certainty for MNEs.

Why It Matters: Budget 2026 must balance global tax alignment with administrative simplification to sustain India's FDI growth.