Union Budget FY 2026-27 positions the Ease of Doing Business (EoDB) as a fundamental pillar of India’s economic growth, emphasizing digitization, tax certainty, and the reduction of litigation.
EoDB provisions under the Union Budget 2026-27
Trade and Investment Facilitation
- Single and interconnected digital window for cargo clearance approvals.
- Individual Persons Resident Outside India (PROIs) can invest in listed Indian companies via the Portfolio Investment Scheme (PIS), with the individual limit to be raised from 5% to 10%.
Tax Reforms
- MAT (Minimum Alternative Tax) to be treated as final tax, with rate reduced from 15% to 14%.
- MAT requires a company to pay a minimum amount of its book profit when its normal income-tax liability is minimal or zero.
- Exemption from MAT for non-residents opting for presumptive taxation.
- Presumptive tax allows income declaration at a fixed % of turnover, reducing compliance.
Rationalizing Penalty
- Pre-deposit requirement for filing appeal reduced from 20% to 10% of the core tax demand.
- Common order for tax assessment and penalty proceedings simplifying process
- Provision for courts to convert imprisonment for certain offences to fine
Trust-based systems
- Trusted importers recognised in risk systems, reducing physical verification and enabling factory-to-ship clearance.
- Duty deferral period for certain Authorised Economic Operators extended to 30 days, allowing delayed payment of customs duties after import. (Clear first-Pay later)
- Validity of binding Advance Rulings under Customs extended from 3 to 5 years.
- Advance tax ruling is a written interpretation of tax laws issued by authorities to clarify specific tax matters for applicants.
