Tax Regime Overview
The Budget 2026 is a much-anticipated event, and its impact on the Indian economy is likely to be significant. One of the main points of discussion revolves
around the income tax regime. Experts are closely watching if the government will continue with the old tax system or introduce alterations to the new one. They are also considering whether the government will try to make the new tax regime more appealing. The budget may also unveil details about joint tax filing for married couples. Simultaneously, tax experts are urging for greater clarity and faster solutions to resolve tax disputes. They also want higher deductions and relief in the 30% tax slab. The new income tax provisions are scheduled to take effect from April 1.
Economic Projections
India's economy is expected to experience steady growth. SBI Research anticipates that the nation will achieve upper-middle-income status by 2030, with a $5-trillion economy in two years. Moody's has set India's growth at 7.3% in fiscal year 2026. The government may aim to limit the fiscal deficit to 4.3% and promote debt consolidation in the medium term. Furthermore, the IMF has raised India's growth forecast to 7.3% in 2025, in spite of global trade and tariff pressures. The government is also planning a strategy of fiscal discipline with a focus on investment in infrastructure, digital economy, and green growth.
Market & Investments
The financial markets are showing various trends and shifts. Real estate sentiment seems to be stabilizing. There is a 25% surge in capital inflows into India's real estate sector, reaching a record $14.3 billion in 2025. Industrial and warehousing demand grew by 16% in 2025 due to large-scale leases. Meanwhile, the stock market has recently seen fluctuations. The Sensex and Nifty 50 experienced significant drops, but there is also anticipation of a potential short-term recovery. Several financial analysts are analyzing whether Dalal Street will maintain its losing streak or recover. Analysts are keeping an eye on the market's trajectory.
Sector-Specific Insights
Several sectors are expected to be significantly affected. The auto industry is seeking incentives for electric vehicles (EVs) and clarity on Goods and Services Tax (GST) after a recovery led by GST 2.0. The real estate industry is urging for tax relief and stable policies. The government is also focusing on sectors like auto, telecom, railways, and defense, with Morgan Stanley emphasizing the need for key reforms in these areas. Additionally, the government is expected to launch the EPFO 3.0 soon, including UPI withdrawals, a new portal, and easier Provident Fund (PF) services.
Tax Refund Delays
Taxpayers are facing delays in receiving their income tax refunds. There are several reasons for these delays. If taxpayers receive any notices from the Income Tax Department, they must know how to respond to them. Individuals who have not received their ITR refund and have received a notice can contact the relevant authorities for assistance. The government has also launched the Integrated Ombudsman Scheme 2026, with grievance redressal going live from July 1.
