Budget 2026 To Likely Focus On Tax Simplicity, GST 2.0 Execution, And Consumption Revival, Say Experts

With the Union Budget for FY26-27 drawing closer, there is growing anticipation about tax reforms that could have a direct bearing on spending. Industry experts broadly expect that this year's budget is unlikely to be headline-grabbing giveaways. Rather, the budget is expected to focus on making taxes simpler, and the Goods and Services Tax (GST) 2.0 more efficient.

Simpler Direct Taxes To Boost Household Spending

The direct tax measures are also expected to have a major role in encouraging consumption. 

According to Vikkas Goyal, founder of VimanoTech, Budget 2026 will offer a chance to enhance disposable income. “Targeted refinements, such as modest increases in standard deductions or allowances for housing, insurance, and retirement savings can improve disposable income, enabling households to borrow responsibly and invest in long-term financial goals,” he says. He also added that predictable tax policies would be equally important.

GST 2.0 Execution Remains Crucial

Regarding indirect taxes, GST 2.0 is emerging as a central theme. Although the rationalisation of rates and changes have been announced, the key to success will be in the implementation phase.

Karan Kakkar, partner for tax planning and optimisation at Grant Thornton Bharat said that the success of the changes will only be possible if they are accompanied by operational support. “It will only achieve its intended impact if supported by effective on-ground measures...done by issuing circulars and clear instructions to operationalise implementation of GST 2.0 reforms including streamlined GST registration process and timely issuance of GST refunds,” he says.

The GST collections in India continue to be strong, crossing the Rs 1.70 lakh crore mark in December 2025, marking a 6.10 per cent year-on-year (y-o-y) increase indicating higher compliance and formalisation of the economy.

According to Manoj Mishra, partner and tax controversy management leader at Grant Thornton Bharat, this trend needs to be accompanied by clarity and dispute resolution. “As the country advances toward Atmanirbhar Bharat and the vision of a developed nation by 2047, the indirect tax framework must deliver greater clarity, neutrality, and seamless credit flow,” Mishra said.

Mishra added that the issues that are still pending include valuation disputes, place of supply, blocked credits, and working capital pressures.

Predictability Encourages Consumption And Credit Use

Apart from GST, harmonisation between direct and indirect taxes is another crucial area that experts have pointed at. This will help in simplifying the taxation system and will enable consumers to plan better and spend without increasing their financial stress.

Shubham Gupta, co-founder of Growthvine Capital, said predictable taxes have a direct behavioural effect. “When customers have a defined and transparent direct tax structure, it provides higher disposable income and subsequently encourages consumers to save, invest, and utilise credit responsibly,” he says. He also added that smooth input credit systems in GST will help unlock demand for credit.

Delivery Over Announcements Is The Key

The general hope with Budget 2026 is that it should bring not only increased tax revenues, but also confidence among taxpayers. This means fewer surprises, quicker refunds, and reduced litigation risk for businesses.

For consumers, simplification of taxes would mean greater confidence and transparency about what they pay and what they save. All these can help fuel consumption, which is a major driver of growth. 

Industry experts are also certain that this Budget will not be one of radical changes, but some fine-tuning and continuity.

Says Goyal, “Clear policy, streamlined compliance, and regulatory certainty are critical to supporting scalable and efficient lending infrastructure, ensuring that banks and financial institutions can reach underserved segments while sustaining growth, innovation, and stability in India’s consumer finance and lending ecosystem."