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Tax Glimpses 2025
The year in retrospect and outlook for 2026
In 2025, India implemented some significant tax and regulatory reforms via the Union Budget and subsequent legislative actions to boost consumption, growth, and combat global competitiveness.
- Taxation: Personal tax exemption under the new regime rose to INR 1.2m; corporate tax rates stayed unchanged. Tax deducted at source thresholds were enhanced for easier compliance, and a presumptive tax regime was introduced for non-residents serving the electronics manufacturing sector.
- GST 2.0: The 56th GST Council Meeting (in September 2025) announced the two-rate GST structure; steps to operationalise the GST Appellate Tribunal (GSTAT) were taken; and customs duties were rationalised.
- Global Trade: India faced US tariffs of 50% on exports like textiles, gems, and marine products. In response, the government launched an Export Promotion Mission for MSMEs, accelerated trade talks with the EU, UK, and South Africa, and leveraged BRICS and the International Solar Alliance to strengthen global positioning.
- Digital regulation: Enforcement timelines for the Digital Personal Data Protection (DPDP) law were set, defining data handling norms. The Online Gaming Act, 2025 introduced a national framework banning stake-based games and ads, while promoting licensed skill-based e-sports and recreational gaming.
- Labour Code: In a historic move, the government implemented the four Labour Codes that consolidate 29 outdated laws with an aim to improve the welfare benefits extended to the workforce.
- Income-tax Act, 2025: The new law was passed to replace the 1961 Act, effective 1 April 2026, promising simplification, reduced litigation, and clearer provisions.
These reforms highlight India’s commitment to a transparent, growth-oriented, globally aligned tax ecosystem, paving the way for Viksit Bharat @2047.
Tax Glimpses 2025 is a report that brings you an overview of the significant changes in 2025 and the outlook for 2026.
In 2025, India implemented some significant tax and regulatory reforms via the Union Budget and subsequent legislative actions to boost consumption, growth, and combat global competitiveness.
Taxation
Personal tax exemption under the new regime rose to INR 1.2m; corporate tax rates stayed unchanged. Tax deducted at source thresholds were enhanced for easier compliance, and a presumptive tax regime was introduced for non-residents serving the electronics manufacturing sector.
GST 2.0
The 56th GST Council Meeting (in September 2025) announced the two-rate GST structure; steps to operationalise the GST Appellate Tribunal (GSTAT) were taken; and customs duties were rationalised.
Global Trade
India faced US tariffs of 50% on exports like textiles, gems, and marine products. In response, the government launched an Export Promotion Mission for MSMEs, accelerated trade talks with the EU, UK, and South Africa, and leveraged BRICS and the International Solar Alliance to strengthen global positioning.
Digital regulation
Enforcement timelines for the Digital Personal Data Protection (DPDP) law were set, defining data handling norms. The Online Gaming Act, 2025 introduced a national framework banning stake-based games and ads, while promoting licensed skill-based e-sports and recreational gaming.
Labour Code
In a historic move, the government implemented the four Labour Codes that consolidate 29 outdated laws with an aim to improve the welfare benefits extended to the workforce.
Income-tax Act, 2025
The new law was passed to replace the 1961 Act, effective 1 April 2026, promising simplification, reduced litigation, and clearer provisions.
These reforms highlight India’s commitment to a transparent, growth-oriented, globally aligned tax ecosystem, paving the way for Viksit Bharat @2047.
Tax Glimpses 2025 is a report that brings you an overview of the significant changes in 2025 and the outlook for 2026.
Glimpses of the year in retrospect
Gross GST collections in October 2025 amounted to INR 1,95,936 crores 1
Income tax collection gross (in crores) 2
Corporate tax
INR 6,90,984.37
Non-corporate tax
INR 8,08,026.36
Securities transaction tax
INR 35,681.88
Other tax
INR 334.62
9.19 crore income-tax returns (including updated returns) filed in FY 2024–25 3
APA
174 APAs which includes 109 (UAPA+B7s) + 65 (BAPAs) in FY 2024–25 4
MAP
131 MAP cases closed, 96 MAP applications invoked and 386 pending MAP applications as of 31 March 20255
FDI inflow grows by
14 % to $81.04bn in FY 2024–256 4
Companies and LLPs registered in FY 2025–26 7
Indian companies registered –
1,37,337 (as of October 2025)
LLPs registered –
51,461 (as of October 2025)
Foreign companies registered –
56 (as of October 2025)
Highlights of the year 2025
NITI Aayog's tax policy working paper on permanent establishment and profit attribution for foreign investors in India
Click here
Outlook for 2026
The year 2026 will be a transformative year for India’s tax and regulatory landscape. The new Income-tax Act, effective 1 April 2026, aims to streamline provisions, simplify compliance, and reduce litigation. Additionally, further reforms are expected in the February Budget. Some areas of reform to watch out for include improved dispute resolution through advance ruling reforms and negotiated settlements, and measures aligned with Niti Aayog’s recommendations on profit attribution, decriminalisation, and trust-based governance.
Alongside tax changes, major regulatory and economic reforms—GST 2.0, GSTAT operationalisation, digital governance initiatives, and consolidated Labour Codes—aim to reduce compliance burdens, enhance transparency, and accelerate dispute resolution. Businesses adopting agile compliance strategies, leveraging technology, and aligning with new data protection and sectoral regulations will be best positioned to mitigate risks and capture growth opportunities in a future-ready economy.
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Kunj Vaidya
Partner and TRS Markets Leader, PwC India
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