FICCI Urges Tax Simplification and Efficiency in Union Budget 2026-27

The Federation of Indian Chambers of Commerce and Industry (FICCI) has presented its key expectations for the Union Budget 2026-27, emphasizing the need for accelerated tax appeals processes, simplified TDS regulations, and targeted customs facilitation. FICCI highlights the urgency of addressing a significant backlog of cases before the Commissioners of Income Tax (Appeals), describing the current backlog and the resulting blocked refunds as a strain on both taxpayers and the system.

To address these concerns, FICCI recommends several measures, including filling existing vacancies, setting time-bound targets for small and complex cases, enabling virtual hearings, and allowing stays on recoveries if an appeal surpasses two years without taxpayer fault. Additionally, FICCI underscores the need for better coordination between faceless units and jurisdictional officers and advocates for sharing draft orders with appellants for early error correction. For ongoing disputes causing cash flow issues, FICCI calls for a reconsideration of the current 20 percent deposit requirement for a stay, proposing the real-time integration of stay orders with the Central Processing Centre (CPC) and the acceptance of bank guarantees or indemnities as alternative security measures.

In its bid to alleviate compliance burdens, FICCI has proposed a streamlined TDS framework. Key suggestions include implementing slab-based TDS for salaries, setting a maximum marginal rate for lotteries and online games, and adopting two standard rates for other payments. Furthermore, FICCI proposes exempting B2B payments reported under GST from TDS, eliminating low-yield TDS/TCS on goods transactions, and publishing a negative list encompassing senior citizen payments, exempt incomes, banks, and registered GST entities. To bolster manufacturing supply chains, FICCI seeks assurances that specific supply chain activities do not establish a 'business connection' for non-residents, thereby preventing unintended tax exposure and litigation.