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Background: A Historic Overhaul of India’s Direct Tax Law During the presentation of the Union Budget 2026–27 , Finance Minister Nirmala Sitharaman announced that the Income Tax Act, 2025 will come into force from 1 April 2026 , replacing the existing Income Tax Act, 1961 , which has governed India’s direct tax regime for over six decades. The stated objective of the new law is simplification without revenue loss , with a focus on removing interpretational ambiguities that have historically fuelled litigation between taxpayers and the tax administration. Notably, the reform is structural and procedural , not fiscal in nature— no changes have been made to income tax slabs or rates . Legislative Authority and Constitutional Basis Statutory Power to Enact the New Law The Income Tax Act, 2025 has been enacted under Article 246 read with Entry 82 of List I (Union List) of the Seventh Schedule to the Constitution of India, which grants Parliament exclusive power to legislate on “taxes on ...

Introduction: Budget 2026 at a Crucial Economic Juncture The Union Budget 2026, to be presented by Finance Minister Nirmala Sitharaman on 1 February 2026 , comes at a defining moment for India’s macroeconomic and fiscal trajectory. Just two days ahead of the Budget speech, industry stakeholders, economists, and policymakers are closely watching government signals on growth, inflation management, fiscal consolidation, and sectoral allocations. This will be Nirmala Sitharaman’s ninth consecutive Budget , marking a rare continuity in fiscal leadership. Notably, this is also the first time in over a decade that the Union Budget will be presented on a Sunday , underscoring its exceptional political and economic significance. Constitutional Basis of the Union Budget Article 112 of the Constitution of India The Union Budget is constitutionally referred to as the “Annual Financial Statement” under Article 112 . It mandates the government to present estimated receipts and expenditures of the ...