PR No – 200
10th Nov 2026
New Delhi
“PHDCCI Submits Pre-Budget Recommendations for Union Budget 2027–28, Calls for Tax Rationalisation, Investment Incentives and Ease of Doing Business Reforms”
New Delhi, November 10, 2026
The PHD Chamber of Commerce and Industry (PHDCCI) submitted its Pre-Budget Recommendations for Union Budget 2027–28, outlining a comprehensive set of recommendations aimed at strengthening India’s investment climate, promoting domestic manufacturing, providing tax relief to individuals and businesses, and improving the efficiency and predictability of the tax administration system.
The recommendations emphasise the need for a competitive and simplified taxation framework that encourages private investment, supports MSMEs, facilitates business expansion and strengthens India’s position as a global manufacturing and investment destination.
“Union Budget 2027–28 presents an important opportunity to strengthen India’s investment ecosystem and reinforce its position as a competitive global manufacturing destination. Rationalisation of capital gains taxation, a competitive corporate tax regime for new manufacturing units, and incentives for research and development will be important in encouraging long-term investments, promoting innovation and strengthening domestic value addition, said Mr. Anil Gupta, President, PHDCCI.”
Promoting Manufacturing, Innovation and Investment
Recognising the importance of manufacturing-led growth, PHDCCI has proposed the reintroduction of the concessional corporate tax regime of 15% for new manufacturing companies under Section 201 of the Income Tax Act, 2025.
The proposal seeks to encourage fresh investments in manufacturing capacity, attract foreign manufacturing investments and support India’s integration into global value chains.
The Chamber has also recommended the reintroduction of a 150% weighted deduction on research and development expenditure, without a sunset clause, to encourage domestic companies to invest in innovation, technology development and higher-value manufacturing. This would support India’s transition from contract manufacturing towards greater domestic value addition and indigenous technological capabilities.
Rationalising Taxation for MSMEs and Businesses
The recommendations place particular emphasis on addressing taxation-related constraints faced by MSMEs, professional establishments and non-corporate businesses.
PHDCCI has recommended increasing the gross receipts threshold under the presumptive taxation scheme for specified professionals from ₹75 lakhs to ₹1 crore, reducing the deemed profit rate from 50% to 33.33%, and extending the scheme to LLPs.
It has also proposed allowing the carry-forward and set-off of accumulated losses in cases of mergers and amalgamations involving non-manufacturing companies, thereby enabling businesses across sectors to undertake restructuring, consolidation and expansion more efficiently.
Further, allow the transfer of Minimum Alternate Tax (MAT) credit to the resulting company in cases of amalgamation and demerger, providing greater clarity and tax certainty in corporate restructuring transactions.
Improving Tax Administration and Reducing Litigation
PHDCCI has called for a more time-bound, transparent and taxpayer-friendly tax administration framework.
Among the important recommendations are:
- Reducing the pre-deposit requirement for disputed tax demands from 20% to 10% of the core principal tax demand, excluding interest, while appeals are pending before the Commissioner of Income Tax (Appeals).
- Introducing statutory timelines for disposal of faceless appeals, with appropriate accountability mechanisms.
- Providing taxpayers the option of physical hearings before the Commissioner of Income Tax (Appeals) in exceptional cases.
- Prescribing a 60-day statutory timeline for the Income Tax Department to issue a No Objection Certificate in merger and demerger proceedings before the National Company Law Tribunal.
- Introducing a 60-day timeline for Assessing Officers to submit remand reports during appellate proceedings.
- Establishing an effective mechanism for correcting erroneous income tax intimations and TDS credit mismatches, either through jurisdictional Assessing Officers or a dedicated cell within the Centralised Processing Centre (CPC).
It is also recommended simplifying TDS and TCS compliance by removing the requirement for routine issuance of certificates, while retaining necessary exceptions for salaried employees, non-residents and cases involving higher deduction or collection due to the absence of PAN.
Supporting Capital Formation and the Real Estate Sector
To promote investment and provide greater certainty to taxpayers, PHDCCI has proposed amendments to clarify the availability of capital gains exemptions where residential property is purchased in the name of an immediate family member, including a wife or daughter.
For the real estate sector, the Chamber has recommended increasing the permissible variation between stamp duty value and actual transaction consideration from 10% to 20%, extending the benefit to secondary and resale transactions and removing the existing monetary ceiling.
The recommendations have also proposed clarifying the tax treatment of compensation received under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, including compensation realised through the monetisation of Transferable Development Rights (TDRs).
Simplification and Rationalisation of the Income Tax Framework
PHDCCI has called for a broader simplification of the direct taxation framework, including the withdrawal of Income Computation and Disclosure Standards (ICDS) and acceptance of financial accounts prepared under applicable Indian Accounting Standards, subject to specific tax adjustments.
The recommendations also identifies specific taxation issues affecting virtual digital assets, agriculture, real estate and corporate businesses. These include addressing ambiguity and high rates of tax deduction at source applicable to virtual digital assets, enabling appropriate TDS treatment for e-commerce transactions involving farmers and Farmer Producer Organisations (FPOs), and reviewing the application of provisions relating to real estate transactions.
LTCG and STCG Taxation
A key priority of the recommendations is the rationalisation of capital market taxation to improve India’s attractiveness for domestic and foreign investors. PHDCCI has proposed the abolition of Long-Term Capital Gains (LTCG) tax on listed equities, reduction of Short-Term Capital Gains (STCG) tax from 20% to 10%, and a reduction in Securities Transaction Tax (STT). The Chamber has highlighted that the rationalisation of transaction and capital gains taxes could help improve investor participation and reduce the overall tax burden on equity market transactions.
On personal taxation, PHDCCI has recommended a calibrated reduction in income tax rates to improve disposable incomes, consumption and tax compliance. It has proposed a maximum tax rate of 20% for income up to ₹30 lakh, 25% for income between ₹30 lakh and ₹50 lakh, and 30% for income exceeding ₹50 lakh.
The Chamber has also called for rationalisation of tax rates applicable to partnership firms and Limited Liability Partnerships (LLPs), particularly given their significant presence in the MSME and professional services sectors.
The recommendations collectively seek to advance a predictable, transparent and growth-oriented taxation framework, aligned with India’s long-term objectives of manufacturing expansion, investment-led growth and enhanced global competitiveness said Dr. Ranjeet Mehta, SG & CEO, PHDCCI.