Tax Reforms Urged to Boost MSMEs and Salaried Class in Upcoming Budget

Rakesh Nangia advocates for tax reduction for salaried individuals and MSMEs in the 2025-26 budget. Key suggestions include simplifying ITR forms, rationalizing capital gains tax, lowering MSMEs tax rates, and enabling preferential rates for new-age technologies and industries. These measures aim to increase investment and economic growth.

In anticipation of the 2025-26 budget, Rakesh Nangia, Founder of Nangia & Co LLP, has called for significant tax reforms to ease the financial burden on salaried individuals and micro, small, and medium enterprises (MSMEs). He asserts that reducing tax rates could stimulate consumer spending and private investment.

Nangia emphasized the need for simplifying Income Tax Return (ITR) forms and rationalizing capital gains taxes as crucial policy amendments. Such reforms, along with lowering the Tax Deduction at Source (TDS) threshold rates, could potentially elevate private sector participation, especially within the manufacturing sector, which extensively involves MSMEs.

The tax recommendations extend to corporate tax, where Nangia suggests reduced rates for emerging technology sectors. Additionally, extending presumptive taxation to all small and medium businesses could lessen administrative burdens, fostering an environment conducive to economic expansion.

(With inputs from agencies.)