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Informist, Wednesday, Sept. 16, 2026

 

NEW DELHI – India should "continuously and pragmatically" address challenges in tax policymaking, Finance Minister Nirmala Sitharaman said Wednesday. The country has its unique and evolving challenges on its path to growth and development. "Tax policy should not add to those challenges or become a deterrent to investment, enterprise, and innovation," Sitharaman said.

 

"It (tax policy) must provide revenues required for our development while remaining fair, predictable, administrable, and supportive of economic activity," the minister said at the 8th International Tax Conference in Bengaluru. Supportive tax policy requires a continuing dialogue between the government, industry, professionals, academics, and institutions such as the International Tax Research and Analysis Foundation, Sitharaman said. "We must collectively identify emerging issues early, examine them objectively, and work towards practical solutions."

 

Over the last two years, the government has simplified and tweaked both the direct and indirect tax structures. Sitharaman, in the Budget for the financial year 2025-26 (Apr-Mar), hiked the tax rebate limit to INR 1.2 million, meaning that individuals with income of up to INR 1.2 million per annum would be exempt from paying any income tax. The move was aimed at increasing disposable income in the hands of taxpayers to spur demand. Later in September 2025, the GST Council decided to overhaul the tax regime by tweaking the four-slab GST structure of 5%, 12%, 18%, and 28% to a two-slab structure of 5% and 18%. The council also introduced a new GST rate of 40% on "sin" and luxury goods.

 

To seek such reforms going ahead, Sitharaman said that the government remains committed to ensuring that "India's tax system continues to evolve with the economy, responsive to change, predictable for taxpayers, and supportive" of the country's larger economic objectives and a journey towards progressive development.

 

She added that India needs an institute for better tax policy research and analysis. "Tax policy should not be one-sided exercise for the government as well as of the government," Sitharaman said. The finance minister also emphasised the need for continuous consultation. "Independent tax policy research should become a regular part of our public discourse," she said.  End

 

Reported by Shweta

Edited by Himanshi Gupta

 

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