Budget wishlist of Aam Aadmi - Rs 1 lakh deduction, higher 30% slab, LTCG relief

Congress president Mallikarjun Kharge on Thursday alleged that the repeal of MGNREGA by the government was an attempt to remove Mahatma Gandhi's name from public memory and asserted that his party will strongly raise the issue during Parliament's upcoming Budget session.  Addressing the National MGNREGA Workers’ Convention organised by the Rachnatmak Congress, Kharge said people must unite and not let the government implement the new law. He said the MGNREGA repeal was aimed at removing Mahatma Gandhi's name from public memory and weakening the concept of Gram Swaraj. - PTI

"India's renewable energy scale-up is no longer constrained by ambition, but by capital efficiency and regulatory clarity. Budget 2026 should focus on providing tax certainty for hybrid and storage-linked renewable projects, enabling fiscal incentives for domestic manufacturing of clean-energy components, and clarifying the treatment of long-duration power purchase agreements. Aligning tax policy with grid integration, energy storage, and transition finance will be critical to sustaining investor confidence and accelerating India's clean-energy transition."

"Production linked incentive schemes have catalysed manufacturing interest, but execution efficiency will determine long-term success. Budget 2026 should address tax certainty around incentives, streamline compliance conditions, and ensure timely disbursement. Predictable fiscal treatment is essential if India is to transition from incentive-led manufacturing to globally competitive scale."

"For India's innovation ecosystem, alignment matters more than incentives. Budget 2026 should address ESOP taxation, provide clarity on the tax treatment of AI-driven services, and extend R&D incentives beyond traditional definitions. Legal and fiscal certainty at early growth stages can significantly influence where capital, talent, and intellectual property ultimately reside."

"India's capital markets are deepening, but transaction friction remains a structural constraint. Budget 2026 should prioritise rationalising transaction taxes, easing compliance for follow-on issuances, and ensuring tax neutrality for REIT and InvIT structures. Predictability and ease - rather than new incentives - will be key to sustaining investor confidence and market momentum."

“India’s retail credit market is on a clear structural upswing, driven by rising consumption and deeper financial inclusion. High-growth segments such as personal loans, education financing and MSME credit, all core focus areas for InCred are expected to outpace the broader market and remain key engines of credit expansion.

The momentum has been meaningfully reinforced by last year’s Union Budget, which expanded credit availability by boosting guarantee coverage for MSMEs/startups and by formalising rural and informal borrowers through the introduction of credit scoring frameworks, thereby lowering lender risk and improving credit penetration.

Looking ahead, one decisive reform could further strengthen the ecosystem: lowering the SARFAESI Act’s minimum loan threshold for NBFCs from Rs 20 lakh to Rs 1 lakh. This would restore parity with HFCs, materially shorten recovery cycles, and deliver a tangible uplift in asset quality.”

"As India prepares for the Union Budget 2026, the focus on strengthening the country's financial and economic ecosystem must go hand in hand with investing in future-ready talent. The accounting and finance profession is undergoing rapid transformation driven by digitalisation, sustainability reporting, AI, and evolving global compliance standards. We hope the upcoming budget prioritises measures that support high-quality professional education aligned with global standards and strong industry-academia collaboration. Incentives for skill-based learning, digital upskilling, and global mobility of Indian professionals will be crucial in positioning India as a hub for world-class finance and accounting talent. Such initiatives can help bridge the skills gap, enhance employability, and ensure India's workforce remains globally competitive."

Kotak has said the government should preserve adequate fiscal space for the implementation of the 8th Pay Commission, which it expects could be rolled out by FY2028. The report noted that while several states have shifted towards populist spending, the Centre has maintained a relatively measured fiscal stance. Kotak estimates revenue expenditure growth at around 5% and capital expenditure growth at about 9%, with a sharper focus on defence spending, projected to grow by 20%, and higher loans to states to support their capital expenditure programmes.

“Budget 2026 should broaden India’s technology focus beyond hardware incentives and explicitly recognise the operating system and software layer as critical digital infrastructure. As a brand which is building computing experiences for Indian users, we believe targeted policy support for indigenous OS development, software R&D, and platform innovation can reshape how people access productivity tools. Incentives for OS-led experimentation and local software ecosystems would help create computing systems that are intuitive, scalable, and aligned with Indian usage realities."

Lok Sabha Speaker Om Birla on Wednesday said that political parties should keep politics aside and work for the smooth functioning of the Budget Session of Parliament. He expressed his view during an interaction with the media at the conclusion of the 86th All India Presiding Officers’ Conference (AIPOC), held at the Uttar Pradesh Vidhan Bhavan, Lucknow. Responding to a question on ensuring smooth conduct of proceedings during the forthcoming Budget Session, the Lok Sabha Speaker said that continuous planned disruptions and disturbances in the House are not appropriate for the country’s democracy. When disruptions take place in the House, the greatest loss is suffered by the citizens. We must strengthen the culture of Discussion and Dialogue, not Disruption. - PTI

With the Union Budget 2026 scheduled to be presented on February 1, 2026, FICCI's recommendations reflect rising expectations for a simpler, fairer and more taxpayer-friendly tax regime.

The industry body has called for quicker resolution of tax disputes and the adoption of a more pragmatic stay-of-demand framework to provide relief to taxpayers during the pendency of appeals.

FICCI has flagged the complexity arising from more than 37 different TDS rates and has urged the government to rationalise the rate structure to reduce disputes and ease compliance.

The chamber has also highlighted the mounting backlog of income-tax appeals, pointing to delays in dispute resolution as a key concern for taxpayers and businesses.

FICCI has drawn attention to anomalies in the new buyback tax framework, especially in cases where share buybacks are financed through share premium or proceeds from fresh share issuances, according to media reports.

For the life sciences sector, EY has called for extending patent box benefits to all patent-linked income, including royalties from licensing and revenue from the sale of patented products. It has also suggested increasing R&D expense deductions to 200% to strengthen the pharmaceutical sector's contribution to Atmanirbhar Bharat and encourage higher investment in critical research and development.

To support investments in stressed and distressed assets, EY has proposed granting full tax pass-through status to income earned by Special Situation Funds. This, it said, would help channel capital into turnaround opportunities and aid broader economic recovery.

EY has recommended extending the existing income-tax holiday for International Financial Services Centre (IFSC) units beyond the current 10 years out of a 15-year block. Given the long gestation period required by sectors such as banking, insurance and fintech, EY believes a longer tax holiday is necessary. It has further suggested that once the holiday period ends, IFSC units should be taxed at a concessional rate of 15% to sustain their global competitiveness.

For the Technology, Media and Telecommunications (TMT) sector, EY has suggested allowing businesses to claim Input Tax Credit (ITC) on essential services currently blocked under Section 17(5) of the CGST Act. These include services such as insurance and motor vehicle rentals that are integral to business operations. EY has also proposed introducing centralised GST registration for large taxpayers to ease compliance and cut administrative costs.

EY has called for the reinstatement of research and development incentives in the chemical industry to drive innovation. It has also proposed offering 200% green credits for investments in renewable energy, encouraging companies to adopt sustainable practices and improve long-term competitiveness.

In the aerospace and defence space, EY has recommended extending tax exemptions to aviation training simulators and aircraft ground support equipment. This move would help create a more comprehensive aviation leasing ecosystem in India, supporting sectoral growth and strengthening India's standing in global aviation markets.

For the retail sector, EY has suggested introducing an online module to allow amendments to Bills of Entry and enable customs duty payments digitally. Linking this system with GST returns would simplify compliance for importers and exporters while reducing administrative overheads.

EY has emphasised the importance of tax certainty for foreign investors. In the absence of clearly defined rules for determining permanent establishment (PE) and profit attribution, such matters often become contentious and lead to litigation. Codified and transparent rules, EY said, would make international taxation more predictable and investor-friendly.

EY has proposed increasing the monthly employee cost threshold for employment-related incentives from Rs 25,000 to Rs 1,00,000. This, it said, would encourage organisations to create more formal employment opportunities across sectors.

To stimulate investment and growth in the manufacturing sector, EY has recommended bringing back accelerated depreciation as a targeted incentive. The firm has suggested making this benefit available within the existing concessional corporate tax regimes of 22% and 15%, ensuring that higher depreciation claims do not trigger Minimum Alternate Tax (MAT). EY believes this move would strengthen the "Make in India" initiative, enhance competitiveness, attract domestic and foreign investment, and generate employment.

EY has called for a comprehensive rationalisation of the Tax Deducted at Source (TDS) regime. With TDS currently applicable to 37 types of resident payments at rates ranging from 0.1% to 30%, the system often leads to classification disputes and cash flow blockages due to delayed refunds. EY has suggested that Budget 2026 should outline a simplified TDS structure with no more than three or four rates. It has also proposed exempting B2B payments subject to GST from TDS, as these transactions are already reported through Form 26AS and the Annual Information Statement (AIS).

According to EY, a stable and predictable tax environment is essential for building trust among taxpayers. The firm has recommended limiting frequent changes in tax rates, noting that consistency in policy improves compliance and supports sustainable revenue collection.

EY has stressed the need for detailed guidelines and comprehensive FAQs to support taxpayers during the transition from the Income Tax Act, 1961 to the New Income Tax Act, 2025. Clear communication will be critical to minimise confusion, prevent litigation and ensure a seamless shift to the new law.

EY has highlighted a series of reforms in the direct tax framework that aim to improve certainty, reduce disputes and strengthen tax compliance as India prepares for Budget 2026.

EY India has also called for a simplified customs tariff structure to ease the compliance burden on importers. The recommendations include sector-wise rationalisation of customs duties and closer alignment of tariff rates with global benchmarks to ensure Indian products remain competitive in international markets.

The firm has suggested extending the validity of Advance Rulings under Customs from the current three years to five years. This would require an amendment to Section 28J(2) of the Customs Act, 1962. A longer validity period would provide greater tax certainty and help businesses plan their compliance with reduced risk of future disputes.

EY India has recommended the introduction of a one-time dispute resolution scheme under Customs law to help clear pending cases. The proposal draws inspiration from the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, which successfully unlocked revenue stuck in prolonged litigation.

EY India has proposed a set of reforms in the indirect tax framework aimed at simplifying compliance, reducing litigation and enhancing the overall ease of doing business in the country.

Abhishek Soni, CEO and co-founder of Tax2win, pointed out that the Section 87A rebate does not apply to capital gains from equity investments, arguing that small investors should not be excluded from basic tax benefits. He said extending the rebate to equity capital gains would encourage wider retail participation in markets. Soni also noted that the standard deduction under the new tax regime is Rs 75,000 and called for it to be increased to Rs 1 lakh to account for rising living and work-related expenses. Additionally, he sought a higher standard deduction for defence personnel.

Sameer Gupta, National Tax Leader at EY India, said that extending the Production-Linked Incentive (PLI) scheme to emerging technology sectors such as artificial intelligence, space and robotics could help stimulate private investment. He also emphasised the importance of public infrastructure spending in futuristic areas like AI, GenAI, robotics and space technology to crowd in private capital. Gupta added that businesses are looking for greater tax certainty and more streamlined compliance processes.

Industry chamber Assocham has recommended comprehensive tax rationalisation to encourage manufacturing and investment. Its key suggestions include restoring the 15% concessional corporate tax rate for new manufacturing companies and clarifying that loan waivers under the Insolvency and Bankruptcy Code (IBC) should not be treated as taxable income.

The Institute of Chartered Accountants of India (ICAI) has submitted its pre-Budget memorandum, urging the government to offer focused tax relief to individual taxpayers, particularly those who have shifted to the new tax regime, which is now the default option.

As the Union Budget 2026-27 approaches, leading professional institutes and industry associations have put forward their demands to the government. Their proposals focus on providing tax relief to individuals, resolving long-pending issues, simplifying compliance and supporting overall economic growth.