Tax authorities have stepped up compliance drives targeting non-reporting of high-value transactions and undeclared offshore/crypto income. Meanwhile, the New Income-Tax Act, 2025 has been notified and is expected to be implemented around FY 2026. At the same time, a phased GST reform and slab rationalisation began rolling out from late September 2025, with meaningful state-level revenue implications.
Key points
- Compliance enforcement: Authorities ramping up checks — notices for non-reporting of large transactions and undeclared income (including crypto & overseas holdings); expect enquiries and possible penalties.
- New Income-Tax Act, 2025: Consolidates and modernises tax law; substantive changes take effect from FY2026 — preparations needed now.
- GST reform & slab rationalisation: GST slabs being simplified and rates adjusted in phases to ease compliance — may cause short-term sectoral revenue shifts.
- State fiscal impact: Some states face short-term revenue pressure from GST changes and must plan compensatory measures in upcoming budgets.
Practical implications
- Businesses: Update pricing, invoicing and ERP/tax software to reflect new GST slabs and ensure contracts and tax-inclusive pricing are revised where needed. Recalculate margins and input-credit impacts.
- High-value taxpayers: Reconcile accounts, file corrected disclosures if necessary, and proactively report large or cross-border transactions to reduce enforcement risk.
- Tax teams & advisors: Start system testing and process changes for the New Income-Tax Act timelines, revise filing workflows, and prepare client advisories for FY2026 transitions.
Conclusion
Expect stronger enforcement, a major rewrite of income-tax law coming into force from FY2026, and phased GST rationalisation that will require prompt updates to systems, pricing and reporting. Businesses, tax teams and high-value taxpayers should act now to ensure compliance and smooth transitions.
FAQs
1. When does the New Income-Tax Act take effect?
Ans: It is slated to be implemented from the 2026 fiscal year; taxpayers and systems should prepare now.
2. Are authorities increasing enforcement?
Ans: Yes — there are intensified compliance drives focused on non-reporting of high-value, offshore and crypto transactions.
3. When did GST changes start?
Ans: GST slab rationalisation began phased roll-out from late September 2025.
4. Will states lose revenue?
Ans: Some states may face short-term revenue gaps due to rate rationalisation and will need fiscal adjustments.
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