Union Budget 2026-27: Burden on middle income rises slightly further

Despite a rise in tax filers, low reported incomes limit average tax contribution, prompting a simplified Income Tax Act from April 2026 to boost compliance and buoyancy

Challenges 

• While the number of income-tax return filers has risen steadily, the bulk of individuals continue to report relatively low incomes, limiting the average tax contribution despite wider compliance

 

Takeaways 

• The rollout of the new Income Tax Act from April 1, 2026, is aimed at modernising and simplifying India’s tax framework. The government says the overhaul will reduce compliance burdens, remove archaic provisions, and make the law more predictable for taxpayers and businesses

Income and tax 

 

Share of tax payable by income class in total tax payable, assesment year (in %)