Budget 2026 Balanced but Falls Short for MSMEs and Investors: CA M.K. Gupta
February 1, 2026
ETT News / Ludhiana
The Union Budget 2026 has drawn mixed reactions from professionals and industry representatives, with experts terming it a balanced budget that lays out a long-term vision but falls short of addressing key demands of MSMEs, taxpayers, and domestic investors.
Reacting to the budget, M. K. Gupta, Chartered Accountant and Peer Reviewer with Mantosh Kumar & Associates, said the government has made visible efforts in sectors such as textiles, agriculture, healthcare, and education. He noted that steps like shifting prosecution provisions to penalties, reducing TDS, extending income tax return filing timelines, scrapping TAN requirements for NRIs, introducing an Overseas Income and Asset Disclosure Scheme, and providing MAT relief reflect a forward-looking approach.
However, Gupta pointed out that tax liability for the common man has remained unchanged. He highlighted that nearly 60 percent of MSMEs operate as partnership firms, yet the tax rate continues at 30 percent, unlike companies and proprietorships that benefit from lower rates or exemption slabs. The long-pending demand to increase permissible remuneration to partners from ₹6 lakh to ₹12 lakh has also not been accepted.
On capital markets, Gupta said expectations of reducing Securities Transaction Tax (STT) to encourage domestic investment were disappointed, as the levy was instead increased. He added that there was no change in equity long-term capital gains tax, which remains at 12.5 percent with an exemption limit of ₹1.25 lakh, despite industry expectations of a 10 percent rate with a higher exemption of ₹5 lakh. The Section 87A rebate was also not extended to long-term capital gains and Hindu Undivided Families (HUFs).
The budget, he said, also missed an opportunity to simplify GST and input tax credit provisions. He expressed concern over limited support for MSMEs, artificial intelligence initiatives, and the development of Indian digital platforms, while allowing foreign companies to establish data centres in India. According to him, stronger measures are needed to promote Indian corporates and indigenous technology platforms.
Summing up, Gupta said the budget maintains fiscal balance and continuity but leaves several reform expectations unfulfilled. He expressed hope that the proposed new Income Tax Act would be genuinely simple, transparent, and taxpayer-friendly.
Union Budget 2026 MSME Tax Partnership Firms STT Hike LTCG Tax Income Tax Act Market Reforms Fiscal Discipline India Budget
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