The Union Budget 2026 creates new opportunities for taxpayers, businesses, and startups in India. Finance Minister Nirmala Sitharaman announced the budget on February 1, 2026, focusing on economic growth, job creation, and simpler tax compliance.
The budget supports manufacturing, helps small businesses (MSMEs), and makes tax filing easier. This article explains income tax benefits, business funding options, and startup incentives that impact your financial planning.
Understanding the Budget 2026
Budget 2026[1] aims to accelerate India’s economic growth and help citizens succeed. The government made plans to boost the economy, address people’s needs, and ensure everyone gets the benefits.
Key benefits include extra time to file taxes, lower compliance costs, and new schemes for small taxpayers. Small businesses will receive Rs 10,000 crore from the SME Growth Fund. The TReDS system makes payments faster. Tax forms are now easier with less paperwork.
Income Tax Changes in Budget 2026
Extended Filing Deadlines for Taxpayers
Now you get extra time to correct your tax returns. Earlier, you could revise your return only until December 31st. Now you have until March 31st. This means three additional months to fix any errors in your filing.
This additional time comes with a nominal fee; if your income is under 5 lakh, you have to pay Rs 1,000, if you earn more than 5 lakh, you have to pay Rs 5,000. If you run a business and do not need a tax audit, you now get one more month to file. The deadline changed from July 31st to August 31st.
New One-Time Foreign Asset Disclosure Scheme
The budget 2026 brings a one-time scheme for small taxpayers with foreign assets. This lets taxpayers who missed declaring foreign assets tell about them within six months. It offers freedom from penalty and legal trouble.
Tax Rate Changes for Specific Demat Transactions
- Futures: STT went up from 0.02% to 0.05%
- Options Premium: STT went up from 0.10% to 0.15%
- Options Exercise: STT went up from 0.13% to 0.15%
Higher STT rates reduce very fast trading while keeping investors safe.
Tax Compliance Changes & New Income Tax Act
- TDS limits are now relaxed
- Non-residents get tax holidays on cloud services income until 2047
- Freedom from legal trouble now covers wrong reporting cases
- Honest taxpayers who settle disputes can avoid penalties
Business Registration & Company Compliance Benefits
Simplified Company Registration Process
The budget 2026 makes business registration easier through the MCA digital portal:
- Automatic GST registration when you start a company
- Direct PAN and TAN are given when you incorporate
- Single digital window for all approvals
Companies can register as a Private Limited Company, LLP, One Person Company, Nidhi Company, Producer Company, Proprietorship, or Public Limited Company.
GST Registration & Compliance Relaxations
- Now GST registration exemption limit has gone up from Rs 20 lakh to Rs 40 lakh.
- MSMEs with a yearly turnover under Rs 5 crore can file quarterly GST returns.
- Input Tax Credit claims become easier for startups
Support for MSMEs and Startups
The Champion SME Growth Strategy
- Equity Support: A SME Growth Fund created around Rs 10,000 crore. Self-Reliant India Fund gets Rs 2,000 crore more. Rs 10,000 crore goes to Fund of Funds for Startups.
- Liquidity Support Through TReDS: MSMEs can get invoice discounting through GeM linked to TReDS. Credit guarantee support through CGTMSE for invoice discounting. TReDS receivables work as asset-backed securities.
- Professional Support: CPSEs must use TReDS for MSME purchases. Corporate Mitras in smaller towns help MSMEs meet compliance needs at low costs.
Startup and Entrepreneurship Benefits
- DPIIT-recognised startups get 100% income tax exemption for 5 years within the first 10 years
- Rs 10 lakh value cap on courier exports removed
- Long-Term Capital Gains tax reduced from 10% to 8%
- New schemes for women-led businesses
- FDI cap in startups raised to 100% in fintech and e-commerce
Intellectual Property Rights & Patent Registration Benefits
Trademark and Patent Services
- Copyright Registration stays easy for digital creators
- Patent Registration support continues
- Trademark Registration and Renewal become faster
- R&D tax credits under Section 35(2AB) available
- Grants for AI and 5G development
NGO Registration & Compliance Framework
NGO Registration & Tax Benefits
- NGO Registration continues with tax breaks
- Section 8 Company Registration gets support
- Registration validity for smaller trusts increased from 5 to 10 years
- Tax exemption under Section 12A continues
- 80G Certificate benefits ensure funding
CSR Compliance & NGO Partnerships
- CSR thresholds proposed to be lowered (Net Worth Rs 100 crore, Turnover Rs 500 crore, Net Profit Rs 3 crore)
- CSR activities must happen through registered Section 8 companies with 12A and 80G registration
- Impact assessment mandatory for spending above Rs 10 crore
Environmental Compliance & Business Regulations
Pollution Control & Sustainability Focus
- Central Pollution Control Board funding increased to Rs 123 crore
- Air Quality Management got Rs 35.26 crore
- Coastal Management Programme gets Rs 1,091 crore
- Green tax benefits for renewable energy
- Low-interest green loans are available
Digital Compliance & Trust-Based Governance
- No criminal charges for non-production of books if TDS paid
- Honest taxpayers can avoid penalties
- MCA V3 digital system simplifies compliance
- Integrated digital reporting across portals
Special Provisions for Business Sectors
Manufacturing Sector Support
Businesses in semiconductor, aerospace, electronics, and renewable energy get customs duty breaks. Benefits include exemptions for aircraft parts, battery equipment, and solar glass inputs.
Export-Focused Business Benefits
- Duty-free import limit for seafood processing went up from 1% to 3%
- Duty-free imports extend to shoe upper exports
- The export timeline extends from 6 months to 1 year
Data Centres & Cloud Services
A major budget 2026 point includes tax holidays for global cloud companies. Non-residents get tax holidays on cloud services income and data centre operations until 2047.
Conclusion
The 2026 Union Budget brings significant changes for taxpayers, businesses, and startups. it’s focuses on simpler tax compliance, MSME growth, and boosting manufacturing. Extended filing deadlines, lower tax rates, and new funding help all businesses. If you need help with any business compliance related query, you can contact Advisou for reliable guidance on all your business compliance needs.
Also Read: NBFC Registration Eligibility: Who Can Apply & Who Cannot?
