A Thought Leadership Note from Total Strategic Solutions India Pvt. Ltd.
Introduction: The New Year, New Resolutions, and the Union Budget
Every New Year arrives with renewed hope, aspirations, and resolutions. For those of us engaged in the compliance and entrepreneurship ecosystem, January assumes special significance. It is the month when the Hon’ble Finance Minister begins the crucial process of preparing the Union Budget—consulting industry leaders, tax professionals, trade bodies, economists, intellectuals, and various stakeholders.
Each stakeholder brings ideas, expectations, demands, and recommendations—often diverse and sometimes conflicting. The challenge before the Finance Ministry is to consolidate these views into a single budgetary framework that attempts to address “all.” In reality, satisfying everyone is impossible—a fact well understood yet repeatedly debated every year.
At Total Strategic Solutions, we believe in beginning the budget conversation early. As we step into the new financial cycle, we intend to present our budgetary perspectives and recommendations starting January 2026, acknowledging that reactions may range from appreciation to disappointment—or even decisions to relocate business interests elsewhere.
The Annual Budget Drama: A Familiar Narrative
The Union Budget is always accompanied by heightened emotions and dramatic responses:
• “This is excellent.”
• “This is disappointing.”
• “We did not expect this.”
• “This is unachievable.”
The ruling party highlights achievements while quietly accepting compromises. The opposition, more often than not, is advised to reject the budget outright—without evaluating right or wrong. Media debates amplify this spectacle, turning the budget into what many call the “Great Indian Tamasha.”
Lost in this noise is the reality faced by the Finance Minister and the policy team—constant demands for tax reductions and incentives, with very few constructive suggestions on how to compensate for revenue loss.
An Unusual Approach: Revenue First, Then Relief
At Total Strategic Solutions, we propose doing the unusual—discussing revenue measures first, followed by relief and reforms.
- Bringing the Unorganised Sector into the Tax Net—Gently
India today has unprecedented access to transaction-level data, thanks to digital payments. With over 50% of transactions shifting to digital modes, the government is well-equipped to identify business activity even within the unorganised sector.
Our suggestion:
• Introduce a simple, fixed tax for unorganised vendors based on turnover—ranging from ₹5,000 to ₹25,000 annually.
• No requirement for books of accounts, audits, or complex filings—only bank statements.
• A clear assurance of no retrospective scrutiny or witch-hunting for prior years.
The incentive:
• Eligibility for formal bank credit (₹5–25 lakhs) based on tax compliance.
• Reduced dependence on unlicensed moneylenders charging exorbitant interest.
• Financial inclusion that enables growth, stability, and dignity.
When informal vendors gain access to affordable institutional credit, repayment discipline improves naturally. After all, recovery mechanisms already work efficiently for informal lenders—banks can certainly design structured daily, weekly, or monthly recovery models.
This approach strengthens both revenue generation and social reform. - Luxury Consumption Tax: A Fair Contribution
Another potential revenue source lies in luxury consumption:
• Purchase of gold, silver, and
• Luxury vehicles priced above ₹75 lakhs
A modest 0.5% to 1% luxury tax would:
• Have negligible impact on high-net-worth buyers
• Generate meaningful revenue
• Promote equity without discouraging consumption
Key Expectations and Reform Demands - MSME Financing: From Policy to Practice
Despite multiple schemes, MSME loans remain largely inaccessible due to:
• Persistent collateral requirements
• Absence of a binding policy framework
• Bank-specific discretionary rejection criteria
As a result, many innovative and viable MSMEs fail to survive. A transparent, enforceable lending framework is urgently required. - Startup Incentives: Clarity and Consistency Needed
Startup incentives must be supported by:
• Clear application procedures
• Transparent acceptance and rejection criteria
• Time-bound decisions and defined benefits
Ambiguity discourages innovation and erodes trust. - Revival of Export Incentives
We recommend the reintroduction and strengthening of:
• Export Incentives
• EOU and STPI benefits
• Faster and simpler import duty refunds for export-oriented imports
Exports remain a critical growth engine and must be incentivised accordingly. - Rationalising Assessments and Audits
• Tax assessment and audit notices should not be issued beyond 3 years.
• All cases pending for over 3 years should be resolved within a maximum of 1 year.
This will reduce litigation, uncertainty, and compliance fatigue. - TDS Reform: Towards Fairness and Standardisation
The current 10% TDS on professionals is disproportionately high.
Our recommendation:
• Cap all TDS rates at 3%
• Ensure uniformity and reduce cash flow strain on professionals and service providers - GST on Services: A Case for Reduction
The 18% GST rate on services places undue burden on the service sector and encourages:
• Artificial turnover splitting
• Migration to composition schemes
• Informal practices
We recommend rationalising GST on services to around 10%, ensuring compliance and sustainability.
Looking Ahead
This blog outlines our broad policy perspectives. In our next blog, we will address sector-specific requirements and recommendations in greater detail.
We have deliberately avoided detailed discussion on tax rebates, as those debates are already ongoing across industry platforms. Our objective is to contribute thoughtfully and constructively to the policy dialogue.
We Welcome Your Views
We invite professionals, entrepreneurs, and industry participants to share their insights and recommendations. Constructive dialogue is essential for shaping a resilient and inclusive economic framework.
HAPPY NEW YEAR
Disclaimer: This blog reflects the author’s personal and professional opinion and is not intended to hurt or target any individual, institution, or authority.
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