Finance Ministry highlights key achievements ahead of Union Budget 2026-27

The government is going to reveal the Union Budget 2026-27 on February 1, and on Tuesday, the Finance Ministry reviewed the major Budget announcements of the past few years and the progress made under them.

Focus on taxpayer relief and investor confidence

According to the ministry, the tax reforms and policy changes are all geared towards taxpayers relief, enhancing investors confidence, and upping the overall efficiency of India's tax system.

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The most significant change was that the Finance Act, 2025, transformed the Personal Income Tax system under the New Tax Regime (NTR) with extensive reforms.

Simpler taxes, more take-home income

The reforms were aimed at making the tax structure simple and leaving more disposable income with the taxpayers. The changes are to be effective as per the Finance Ministry from FY 2025–26 (Assessment Year 2026–27).

Apart from these, the ministry also pointed out the Income Tax Bill, 2025, which it described as a significant move towards the replacement of the direct tax regime that has been in existence in India for nearly sixty years.

The new bill is proposed to be just the right mix of investor confidence, taxpayer relief and ability to administer. Modernising the tax law, the government is hoping to make tax collection more straightforward, less risky and thus, more inviting for business.

Corporate tax reforms to boost manufacturing

In the context of the tax policy reforms, corporate tax was one of the areas where the biggest transformations occurred.

Corporations that do not take advantage of certain deductions and exemptions have the right to pay a flat tax of 22 per cent.

In addition to this, new manufacturing companies will have a tax rate of 15 per cent for a certain period which will be a big help.

One of the main purposes of the reforms is to attract more investments, thus increasing manufacturing activities and creating new job opportunities.

The New Tax Regime is beneficial for the individual taxpayers as it comes with easier tax slabs, lower rates, and larger rebates.

The new structure states that individuals with an income of up to Rs 12 lakh are exempt from income tax.

The case is similar to salaried taxpayers where the effective tax-free income is the maximum limit of Rs 12.75 lakh after considering the standard deduction of Rs 75,000. This change has been a big relief for the middle class and salaried workers.

Infrastructure push through tax exemptions

By the Finance Act 2025, the advantages under Section 10(23FE) have been extended. Because of this, Sovereign Wealth Funds (SWFs) and Pension Funds that qualify for the exemption can make the necessary investments in infrastructure projects till March 31, 2030.

These investments will not be liable to taxation on dividends, interest, and long-term capital gains (LTCG), which will encourage the inflow of foreign capital into India’s infrastructure sector for the long term.

The ministry further mentioned that the International Financial Services Centre (IFSC) related activities and date extensions have been completely executed through the Finance Act, 2025.

The changes took effect starting April 1, 2025, and thus, India’s attractiveness as a financial hub globally has been strengthened, IANS reported.

Certainty of taxation for AIFs

The administration also met the promise made in the Budget of giving “certainty of taxation” to Alternative Investment Funds (AIFs).

This was done by providing a very clear definition of the classification of income from securities and hence the reduction of confusion and litigation.

The overall picture painted by the Finance Ministry through these reforms is that the government is indeed still concentrating on and therefore simplifying taxation, supporting economic growth, and creating a stable and predictable policy environment that will last through the upcoming Union Budget.

With inputs from agency