Tax Advisory in India (2026): New Income Tax Act, GST 2.0 & Planning Guide
India tax advisory 2026 — the new Income Tax Act 2025, revised tax slabs, GST 2.0, corporate tax rates and startup tax holiday rules explained. Book a free tax planning consultation.
Sources: Income Tax Department, Govt. of India • Bajaj Finserv / Income Tax Dept • Income Tax Department • DPIIT / Income Tax Act
2025-26 has brought the most significant tax reform cycle in India in years: a brand-new Income Tax Act (replacing the 1961 Act, effective 1 April 2026), revised personal income tax slabs, and the GST 2.0 rate rationalization. If your company's tax planning strategy is based on rules from even two years ago, it's likely already outdated.
This guide covers what's actually changed, current corporate and personal tax rates, and how proactive tax planning — not just annual compliance — protects margins for growing companies.
The New Income-Tax Act, 2025: What Founders Need to Know
The Income-Tax Act, 2025 formally replaces the 1961 Act starting 1 April 2026 — a rewrite intended to simplify language and structure rather than fundamentally change tax policy, but with renumbered sections (including the section governing the startup tax holiday, previously Section 80-IAC). Companies and advisors referencing old section numbers in contracts, tax opinions, or internal documentation will need updated references once the new Act is in force.
Personal & Corporate Tax Rates You're Actually Working With in 2025-26
New Tax Regime (Individuals), FY 2025-26
Income up to ₹4 lakh: Nil. ₹4-8 lakh: 5%. ₹8-12 lakh: 10%, scaling up to 30% for income above ₹24 lakh — a meaningfully higher nil-tax threshold than prior years, aimed at boosting disposable income.
Corporate Tax Rates
Most domestic companies pay a base rate of 22% (concessional regime, no exemptions) or 25-30% under the standard regime depending on turnover, plus applicable surcharge (7% for income ₹1-10 Cr, 12% above ₹10 Cr) and 4% health & education cess.
Section 80-IAC: The Startup Tax Holiday Most Founders Underuse
DPIIT-recognised startups incorporated within the eligible window can claim a 100% deduction on profits for any 3 consecutive years out of their first 10 years of operation — effectively zero income tax on profits during those years. The catch: Minimum Alternate Tax (MAT) at 15% on book profits still applies during the holiday for companies (though LLPs are exempt from the equivalent AMT), and the deduction requires active DPIIT recognition plus meeting turnover and innovation criteria — a step many eligible startups simply never file for.
GST 2.0 and International Tax: Two Sides of the Same Compliance Coin
For companies with cross-border operations, GST 2.0's rate changes intersect with transfer pricing and international tax structuring — particularly for companies invoicing services across the India-UAE-Singapore corridor, where correct GST treatment of export of services (typically zero-rated) needs to be verified against the new rate structure to avoid unnecessary tax leakage.
New Tax Regime Slabs, FY 2025-26 (Individual)
Key Tax Changes Effective 2025-26
| Change | Effective Date | Impact |
|---|---|---|
| GST 2.0 — New 5%/18%/40% slabs | 22 September 2025 | Re-classification of most goods/services |
| New tax regime — ₹4L nil slab | FY 2025-26 (from 1 April 2025) | Higher take-home for salaried individuals |
| New Income-Tax Act, 2025 | 1 April 2026 | Renumbered sections, simplified structure |
| Section 80-IAC window (extended) | Budget 2025-26 announcement | More startups eligible for tax holiday |
Questions Founders Search Before Hiring an Advisor
Will my company's tax filings need to change under the new Income-Tax Act, 2025?
The core compliance process (ITR filing, TDS, advance tax) remains structurally similar, but section references used in your tax opinions, contracts and internal documentation will need updating once the Act takes effect from 1 April 2026, since sections have been renumbered.
What is the difference between the old and new tax regime for individuals?
The new tax regime offers lower rates and a much higher nil-tax threshold (₹4 lakh) but removes most exemptions and deductions (HRA, 80C investments, etc.) available under the old regime — the better choice depends on how much you claim in deductions currently.
Does my startup automatically get the Section 80-IAC tax holiday?
No — it requires active DPIIT recognition and a separate application/certification for the 80-IAC tax exemption, meeting specific innovation, turnover and incorporation-date criteria. It is not automatic just because you're incorporated as a startup.
How does GST 2.0 affect export of services (e.g., IT/consulting to foreign clients)?
Export of services generally remains zero-rated under GST regardless of the 2.0 rate changes, but companies should verify their specific service classification hasn't shifted in a way that affects input tax credit eligibility or invoicing compliance.
Ready to Get Expert Tax Advisory Help?
Book a free consultation with our advisory team — get a fixed-fee quote and clear timeline within one business day.
Frequently Asked Questions
How much does tax advisory cost for a startup or SME?
Tax advisory is typically bundled with our CA compliance retainer for ongoing needs, with standalone project-based pricing for specific matters like 80-IAC application or transfer pricing documentation. We quote based on scope after a free consultation.
Can you help us claim the startup tax holiday under Section 80-IAC?
Yes — we assess eligibility, prepare the DPIIT recognition and 80-IAC application, and advise on which 3 consecutive years within your eligible window to claim the exemption for maximum benefit.
Do you handle both personal and corporate tax planning?
Yes — for founders, we advise on personal tax planning (including old vs new regime choice, ESOP tax treatment) alongside corporate tax strategy for the company.
What is transfer pricing and does my startup need to worry about it?
Transfer pricing rules apply to transactions between related entities across borders (e.g., an Indian subsidiary and its Singapore parent) — if your group has any cross-border intercompany transactions, transfer pricing documentation is likely required regardless of company size.
Can you help reduce our GST liability legally?
We focus on GST optimization within full legal compliance — correct classification, maximizing legitimate input tax credit, and structuring transactions efficiently — not aggressive avoidance schemes that create audit risk.
Do you provide tax advisory for companies with UAE or Singapore operations?
Yes — cross-border tax advisory, including Double Taxation Avoidance Agreement (DTAA) benefits and international tax structuring across India-UAE-Singapore, is a core part of our practice.
What happens if we get an income tax scrutiny notice?
We provide notice response support — reviewing the specific query, preparing documentation, and representing your case through the assessment process, drawing on our CA and tax advisory team's direct experience.
Is FEMA/FDI advisory part of your tax services or separate?
FEMA & FDI advisory sits alongside our tax advisory practice given the overlap (foreign investment structuring has direct tax implications), and we typically address both together for funded or expanding companies.
How often should we review our tax planning strategy?
At minimum annually (ideally each budget cycle, since rules change frequently as seen with GST 2.0 and the new Income-Tax Act) and whenever a major business event occurs — fundraising, entering a new state/country, or crossing a turnover threshold.
Why choose Matriye Capital for tax advisory?
Our tax advisory team works within the same practice as CA compliance, global expansion and CS services — so tax planning is built into your broader compliance and growth strategy, not handled as an isolated annual exercise.
In-Depth Tax Advisory Blog Guides
Pricing, process, FAQs and how to get started — a dedicated guide for every service below.
More In-Depth Guides
Talk to a Tax Advisory Specialist Today
Get a fixed-fee quote and a clear timeline within one business day.