India’s tax framework covers direct taxes like Income Tax, transaction levies like Commodity Transaction Tax (CTT), and indirect taxes under Goods and Services Tax (GST), each with distinct bases, timelines, and compliance rules for taxpayers and businesses.

Income Tax

• Income tax applies to individuals, HUFs, firms, and companies on annual taxable income, with the default regime continuing to be the simplified new regime from FY 2025–26, alongside an optional old regime with deductions and exemptions.
• Budget 2025 revises slab rates under the new regime effective 1 April 2025, with progressive bands starting nil up to ₹4 lakh and rising to 30% above ₹24 lakh; department help pages and advisories reflect AY 2025–26 filing categories and rates by assessee type.

Key updates FY 2025–26

• New slab schedule under section 115BAC for FY 2025–26/AY 2026–27: 0% up to ₹4 lakh; 5% ₹4–8 lakh; 10% ₹8–12 lakh; 15% ₹12–16 lakh; 20% ₹16–20 lakh; 25% ₹20–24 lakh; 30% above ₹24 lakh; old regime slabs remain unchanged and require opting in.
• Government communication and portals detail transitional guidance, FAQs, and press materials linked to the Income-tax Bill/Act 2025 and Budget 2025, focusing on simplification and digital compliance tools.

Corporate tax snapshot

• Domestic company guidance for AY 2025–26 addresses surcharge thresholds and concessional regimes; corporates should check current CBDT instructions and budget updates for applicable rates and conditions.
• Compliance continues through the e-filing portal with schema updates and utilities aligned to Finance Bill changes for FY 2025–26.

Commodity Transaction Tax (CTT)

• CTT is a transaction tax on non-agricultural commodity derivatives (futures/options) executed on recognized exchanges; agricultural commodities remain exempt to support the farm sector.
• The headline CTT rate on non-agri commodity futures is typically 0.01% of trade price, with specific option legs at 0.05% on premium (seller) and 0.0001% on settlement when exercised (buyer), allowed as a business expense against trading income.

CTT compliance and impact

• Exchanges levy and collect CTT at trade execution; market participants should track contract notes for CTT entries and claim it as an allowable expense while computing business profits from derivatives.
• CTT raises transaction costs relative to pre-2013 norms but is intended to align commodity derivatives with securities taxes and curb excess speculation.

Goods and Services Tax (GST)

• GST, implemented 1 July 2017, is a destination-based value-added tax replacing excise, service tax, and state VATs, enabling seamless input tax credit across the value chain to avoid cascading.
• The GST Council’s September 2025 reform rationalizes rates, with policy communications indicating a shift toward simplified slabs and targeted demerit rates, accompanied by faster registration and refund processes for certain taxpayers.

GST rate structure and reform

• Public briefings describe a rationalized slab approach centered around 5% and 18% with a demerit band for luxuries/sin goods, replacing intermediate slabs to reduce complexity; businesses should monitor council notifications and CBIC updates for item-wise schedules and go-live dates.
• Sectoral write-ups indicate relief on essentials and consumer goods and higher rates for luxury/sin categories; entities must update pricing, ERP tax codes, and HSN/SAC mappings when new rates take effect.

Practical compliance tips

• Individuals: Evaluate whether the new regime’s lower rates outweigh deductions under the old regime; use department calculators and return utilities updated for AY 2026–27.
• Traders: In commodity derivatives, factor CTT into breakeven and strategy costs; record CTT for expense deductibility and reconcile with exchange statements.
• Businesses: Prepare for GST rate changes by reviewing classification, contracts, and IT systems; follow council decisions and departmental circulars close to the effective date for exact item-wise rates.

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