According to KPMG India’s Pre-Budget study, issued on Tuesday, stakeholders are demanding additional tax reforms ahead of the Union Budget 2026–2027, such as a larger standard deduction and the simplification of the income tax legislation.
The survey shows significant support for changes to safe harbour regulations and transfer pricing. About 71% of respondents preferred adjustments to the safe harbour framework, especially concerning thresholds and margins for different business types. The government should raise the paperwork requirement from ₹1 crore to ₹5 crore and establish a minimum threshold for the applicability of transfer pricing regulations, according to nearly three-fourths of those surveyed.
73% of respondents wanted the standard deduction for salaried taxpayers to be significantly increased under the new tax regime. The budget is set at ₹75,000. Thirty-four per cent of respondents expect the reinstatement of a reduced tax rate regime for manufacturing, while more than half support the introduction of specialized, sector-specific incentives. This is particularly important as many income tax advantages have either expired or are nearing their expiration dates.
To provide long-term tax certainty, the study also found that 51% of participants sought a safe harbour for International Financial Services Centre (IFSC) arrangements. Consolidation of rate categories under TDS and TCS, as well as rationalization of assessment, litigation, and capital gains taxation, have also been identified as crucial areas in need of more reform.
Concerns about resolving disputes were also raised. Nearly half of the respondents claimed that the current procedures for peaceful dispute resolution were not producing the desired results. Roughly 52% of respondents demanded a specified deadline for the mandatory disposition of appeals at the commissioner of income tax level.
In response to the results, Sunil Badala, Partner and National Head of Tax at KPMG in India, stated that despite recent initiatives that have increased discretionary incomes and consumption, stakeholders still anticipate significant reforms and incentives.
More than 100 C-suite executives and senior executives from a variety of industries, including consumer markets, healthcare, technology, financial services, and life sciences, participated in the study.
More than 100 C-suite executives and senior executives from a variety of industries, including consumer markets, healthcare, technology, financial services, and life sciences, participated in the study.
