Union Budget 2026: PHDCCI demands 20% tax on income up to Rs 30 lakh, know what will be the benefit

The PHDCCI has recommended changes to the income tax slabs. It has suggested reducing the tax to 20 percent for incomes up to ₹30 lakh annually, 25 percent for incomes up to ₹50 lakh annually, and 30 percent for incomes above that level. Union Budget 2026: The process of preparing the Union Budget 2026 has begun. Finance Minister Nirmala Sitharaman held discussions with leading economists earlier last week. Meanwhile, industry has expressed its expectations for the new Union Budget. The PHDCCI, a leading industry chamber, has communicated its expectations regarding the Union Budget 2026 to the Finance Ministry. The industry chamber says that if the government implements direct and indirect tax reforms in the budget, which will be presented in early February next year, it will significantly benefit the economy. Recommendation to Reduce Personal Income Tax Rates PHDCCI has advised the government to revise the income tax slabs. It has suggested reducing the tax on income up to ₹30 lakh per annum to 20%, reducing the tax on income up to ₹50 lakh per annum to 25%, and keeping the tax rate at 30% for incomes above this level. It has stated that this will reduce the tax burden on the middle class. Besides, income tax compliance will also increase. Demand for Changes in Tax Rules on Share Buybacks The industry chamber has also advised the government to set a time limit for appellate orders. It has also demanded changes in the rules for share buybacks. It has stated that profits from share buybacks should be treated as capital gains instead of dividend income, and capital gains tax rules should then apply. PHDCCI believes that taxpayers should be given more time to file revised and belated returns. Currently, the deadline for filing belated and revised income tax returns is December 31st of the assessment year. New manufacturing companies should be given tax breaks again. It has also urged the government to reinstate Section 115BAB of the Income Tax Act. This section provided a 15% corporate tax concession for new manufacturing companies. The Chamber of Commerce argues that due to COVID, industries were unable to fully take advantage of this provision, which was subsequently repealed. It needs to be reinstated, as it will boost manufacturing in the country. Union Budget 2026 may include major measures to boost growth. The Finance Minister is expected to present the Union Budget 2026 on February 1st next year. However, a formal announcement has not yet been made. For the past several years, the government has presented the Union Budget for the new financial year on February 1st. This year’s budget is expected to focus on measures to boost growth. The government may announce major reforms to this effect. In Union Budget 2025, the Finance Minister announced tax-free income up to ₹12 lakh per annum. Read More: UIDAI launches new Aadhaar card mobile application; learn how to download it