New Delhi, Feb. 10 -- Think Change Forum (TCF), an independent think tank dedicated to generating new ideas and finding solutions for navigating through a new changing world, lauded the Union Budget 2025-26 for its bold steps in shifting the direction of India's taxation philosophy.

The landmark budget taxation proposal is aimed at expanding the tax base, boosting economic growth through consumption and savings and also paving the way for future reforms focusing on simplification and greater compliance, it stated.

Think Change Forum stressed that for India to achieve true revenue buoyancy, it must follow through with a consistent series of reforms that reduce peak tax rates and eliminate unnecessary burdens like double taxation on dividends, which continues to discourage resident investors. "For our tax system to be fair and competitive, we need to make the tax rates attractive enough that all businesses-small, medium, and large-are incentivized to remain compliant, while individuals find the tax structure equitable.", said Ranganath Tannir, Secretary General, TCF.

The forum has emphasized shifting away from the traditional approach of imposing incremental taxes on a narrow, lucrative section of taxpayers-a philosophy that has largely prevailed since India's independence-towards lowering tax rates for all and broadening the tax base.

The Forum has pushed for reforms that focus on the principles of F.L.A.T.-Fewer and lower tax rates, Litigation reduction, an All-inclusive wider tax base, and Tax collection without withholding. These measures, according to TCF, will drive long-term economic stability and contribute to India's goal of becoming a developed economy by 2047.

It has also underscored that reduced peak tax rates are not just beneficial for individuals but are crucial for businesses, especially small and medium-sized enterprises (MSMEs).

A Step in the right direction, which needs to continue

The Union Budget has introduced several measures that align with TCF's advocacy for compliance-driven tax reform. These include rationalization in Tax Deducted at Source (TDS) and Tax Collected at Source (TCS), and extending the timeline to file updated income tax returns from two to four years. These steps are expected to ease the compliance burden and bring more people into the formal tax system, which is critical for sustained economic growth, the forum stated.

Experts that have been associated with Think Change Forum and have been providing their recommendations for tax moderation and widening the base have lauded the government's new taxation proposals and mindset.

Nilanjan Banik, Professor, School of Management at Mahindra University and Advisor, TCF, said: "With the massive relief to the middle class, consumption cycles are expected to grow significantly. With increased consumption, GST collection will most likely reach newer record levels. This should hopefully create the desired room for the further simplification of the GST structure."

Published by HT Digital Content Services with permission from Millennium Post.