Budget 2026 Preview: Tax Reforms and Incentives Rolled Out Ahead of Budget
Budget 2026 Preview: Tax Reforms and Incentives Rolled Out Ahead of Budget
Finance Ministry highlights completed tax reforms, investment incentives and compliance easing as Budget 2026 approaches, with inland vessel tax rules and extended IFSC concessions.
The Finance Ministry has highlighted the status of key tax and policy reforms announced in previous budgets, aimed at boosting investment certainty and easing tax compliance ahead of Budget 2026. In a series of posts, the ministry said several direct tax reforms have been implemented, spanning startup incentives, capital gains rationalisation, and infrastructure-related tax measures, all part of the broader effort to streamline India’s tax framework and support economic growth.
Among the major steps, the government extended the Tonnage Tax Scheme to inland vessels by amending Section 115VD of the Income Tax Act. From April 1, 2026, inland vessels registered under the Indian Vessels Act, 2021, will qualify for the scheme, a move aimed at promoting inland water transport and improving logistics efficiency.
The ministry also announced that tax concessions for entities operating in the International Financial Services Centre (IFSC) have been extended by five years until March 31, 2030. The extension covers ship-leasing units, insurance offices, and treasury centres of global companies, reinforcing India’s ambition to become a global financial hub.
For individual taxpayers, relief measures under the National Savings Scheme (NSS) and NPS Vatsalya were highlighted. Withdrawals from NSS accounts made on or after August 29, 2024, are now fully tax-exempt. In addition, parents or guardians investing in NPS Vatsalya are eligible for an additional deduction of up to ₹50,000 under Section 80CCD(1B), over and above the Section 80C limit. Property taxation was also simplified, with taxpayers now allowed to claim nil annual value for two self-occupied properties without conditions, among other provisions. These steps are designed to reduce compliance burdens and enhance the attractiveness of savings and investment channels ahead of the Budget.
