Union Budget 2026: India's Chance to Finalize Income-Tax Simplification

• The Income-tax Act, 1961 (ITA 1961) was complex, leading to high compliance burdens and tax litigation.
• The Hon'ble Finance Minister announced a comprehensive review of ITA 1961 in Budget 2024-25 to simplify the law and reduce disputes.
• The Income-tax Act, 2025 (ITA 2025) replaced ITA 1961, reducing sections from 819 to 536 and simplifying provisions, effective April 1, 2026.
• Despite ITA 2025, structural complexities like subjective interpretations and varied TDS/TCS rates persist, causing confusion and disputes.
• Union Budget 2026 offers a critical opportunity to address remaining ambiguities, rationalise compliance, and strengthen dispute resolution mechanisms.

Why It Matters: Union Budget 2026 is crucial for India to complete its income-tax simplification and reduce compliance burdens.