New Delhi: As India prepares for the presentation of the Union Budget 2026-27 on February 1, the Finance Ministry on Tuesday reviewed significant announcements and policy measures from previous budgets, highlighting progress under major reforms.

The Finance Act 2025 introduced comprehensive changes to the Personal Income Tax structure under the New Tax Regime (NTR), aimed at increasing disposable income for taxpayers. These reforms are effective from the financial year 2025-26 (Assessment Year 2026-27).

The Income Tax Bill 2025 represents a major overhaul of India’s six-decade-old direct tax framework, balancing taxpayer relief, investor confidence, and administrative efficiency. Corporate tax reforms include a 22 per cent tax rate for companies not claiming specified deductions and exemptions, and a 15 per cent tax rate for new manufacturing companies for a defined period. For individual taxpayers, the new regime provides liberal slabs, lower rates, and enhanced rebates, ensuring individuals earning up to ₹12 lakh (effectively ₹12.75 lakh for salaried taxpayers considering standard deductions) are exempt from tax under these provisions.

The Finance Act 2025 also extended benefits under Section 10(23FE), allowing eligible Sovereign Wealth Funds (SWFs) and pension funds to continue making qualifying infrastructure investments until March 31, 2030, with tax exemptions on dividends, interest and long-term capital gains (LTCG).

Additional measures include expanded activities and date extensions for the International Financial Services Centre (IFSC), fully implemented from April 1, 2025, along with clarified taxation for Alternative Investment Funds (AIFs), providing certainty for income classification from securities.

These reforms reflect the government’s focus on modernising tax policy, encouraging investment, and enhancing the ease of compliance for individuals and corporates ahead of the upcoming Budget 2026-27.

IANS