The Lok Sabha on Wednesday passed the Finance Bill 2026, along with 32 government amendments, completing its role in approving the Union Budget 2026–27. The Rajya Sabha will now take up the Bill, and once it is approved, the Budget process for the upcoming fiscal year will be formally concluded.
The Union Budget 2026–27 proposes a total expenditure of Rs 53.47 trillion, marking a 7.7 per cent increase over the current financial year ending March 31. The government has earmarked Rs 12.2 trillion towards capital expenditure, continuing its focus on infrastructure and growth-led spending. Gross tax revenue is estimated at Rs 44.04 trillion, while gross borrowing is projected at Rs 17.2 trillion. The fiscal deficit for FY27 is targeted at 4.3 per cent of GDP, slightly lower than 4.4 per cent in the ongoing fiscal.
Among the key amendments, the government has proposed giving wider powers to tax authorities to reopen past assessments beyond existing time limits, particularly in cases where courts or appellate tribunals issue relevant findings. This effectively means that even closed tax cases could be brought back under scrutiny if linked to judicial orders.
The Bill also seeks to plug loopholes in reassessment procedures by tightening timelines and reducing ambiguity around reopening cases. In addition, it introduces defined timelines for issuing tax notices, giving taxpayers a minimum of 30 days and up to three months to respond. This is expected to bring greater predictability and structure to tax proceedings.
Another significant provision offers protection to tax officials, ensuring that their decisions cannot be challenged on purely technical grounds. This move is aimed at strengthening the government’s position in litigation and reducing procedural disputes.
The amendments also provide a boost to Special Economic Zones (SEZs) and International Financial Services Centres (IFSCs), with tax deductions for eligible units extended to 20 years under Section 80LA. Additionally, the Bill proposes capital gains tax relief for beneficiaries under the land pooling scheme in Andhra Pradesh.
For taxpayers, the changes are likely to bring more clarity in terms of timelines for notices but may also increase the risk of scrutiny, especially with the possibility of reopening older cases. For businesses, the extended SEZ benefits offer greater certainty for long-term planning, although stricter enforcement norms could limit the scope for challenging tax actions and tilt disputes in favour of the government.