The Union Budget has traditionally shaped India’s economic and fiscal direction, influencing policy, business decisions, and individual planning. However, the Union Budget 2026 assumes a distinct significance as it coincides with the coming into force of the Income Tax Act, 2025, effective from 01.04.2026, marking a transition from a long-standing legislative framework to a newly structured tax regime. This shift is not merely a set of amendments, but brings with it practical questions on applicability, interpretation, and compliance, particularly in relation to the interplay between the old and the new Act.
In this context, the Union Budget 2026, acts as an important link, but not the centerpiece. The real focus for professionals and taxpayers alike lies in understanding how the new Act operates, how it interacts with the existing framework during the transition phase, and how it impacts routine compliance areas such as TDS, filings, and reporting obligations.
It is with this perspective that the 12th edition of our publication has been conceptualized. This work is not intended to be a mere summary of Budget proposals. Instead, it is designed as a practical guide to navigate the transition to the Income Tax Act, 2025. The analysis attempts\ to bridge the existing law with the new framework, highlight areas of continuity and change, and address issues that are likely to arise in implementation.
Recognizing that this transition will give rise to numerous interpretational and practical challenges, we have also included a set of FAQs both framed by us and released by CBDT to simplify complex issues and provide clarity in a concise and accessible manner.
Another significant development is the implementation of the new Labour Codes effective from 21.11.2025, marking a step towards a more simplified and coherent regulatory framework. This edition includes a set of FAQs covering key aspects of these Codes, with valuable guidance from Mr. S.V. Ramachandra Rao.
This publication reflects the collaborative efforts of CS D V K Phanindra, CA Narendra R, CA Lokesh P, Reethika Reddy G, Aananditha B, Mukesh J and other members of our team and our continued endeavor to present analysis in a clear and practical manner.
Special thanks to Shri J. Krishna Kishore, IRS (Retd.), Former Chief Commissioner of Income Tax, for his guidance and review of the analysis and his foreword on the analysis.
I would like to place on record my gratitude to CA G. Sai Mallikarjuna Rao, and CA K.L. Bhavana, for her contribution on budget aspect. My sincere thanks to Padmaja Printers Private Limited and Ballon Networks in printing/publishing the Companion.
I am confident that this Companion will serve as a reliable reference, assisting readers in understanding the developments in Income Tax Act, 2025 and Union Budget 2026.
CA Suresh Babu S
Chairman cum Managing Partner
SBS and Company LLP
