1. 🕒 Mark the New Tax Deadlines
The Budget has introduced a more “workable” calendar for small businesses:
Non-Audit Businesses: Your ITR filing deadline is now proposed to be August 31st (instead of July 31st).
Revised Returns: You now have until March 31st of the assessment year to correct any errors in your filing (with a nominal fee).
Action: Update your internal compliance calendar to avoid last-minute rushes.
2. 📑 Transition to the “Tax Year” Structure
Starting April 1, the confusing “Assessment Year” (AY) and “Previous Year” (PY) terminology is being scrapped.
The Change: Everything will now be referred to as a single “Tax Year” (e.g., Tax Year 2026-27).
Action: Ensure your accounting software and internal records are ready to adopt this unified naming convention to align with the new ITR forms.
3. 💸 Clear MSME Dues (The 45-Day Rule)
The strict enforcement of Section 43B(h) (now mapped to Section 37 in the new Act) continues.
The Rule: To claim a tax deduction for expenses, you must pay your Micro and Small Enterprise vendors within 45 days (if there’s a contract) or 15 days (if no contract).
Action: Reconcile your “Sundry Creditors” list immediately and clear all pending MSME payments before March 31st.
4. 🤖 Leverage Automated TDS Certificates
No more chasing Assessing Officers for manual approvals.
The Change: A new rule-based automated system is being launched for obtaining Nil or Lower TDS deduction certificates.
Action: If your business has high expenses but low margins (or tax-exempt status), apply through the new portal starting April to improve your cash flow immediately.
5. 💳 Boost Liquidity via TReDS & GeM
For MSMEs supplying to the government or large corporates:
The Update: CPSEs are now mandated to use TReDS for settlement. Additionally, the credit guarantee for startups has been doubled to ₹20 Crore.
Action: Register on the TReDS platform to get your invoices discounted and payments released faster.
6. 📉 Re-evaluate Corporate Tax & MAT
If you are a private limited company:
The Shift: The Minimum Alternate Tax (MAT) rate is reduced to 14% and becomes a “final tax” for those in the new regime.
Action: Consult with us to see if migrating to the 22% concessional tax regime is now more beneficial for your startup given the new 25% cap on MAT credit set-off.
7. 🏷️ Correct “Manpower Supply” TDS
The Clarification: The Budget explicitly treats manpower supply as “Contract Work”.
Action: Ensure you are deducting TDS at 1% or 2% (as a contractor) rather than at higher professional fee rates to avoid disputes.
Conclusion
The Union Budget 2026 reflects the government’s intent to create a business-friendly, transparent, and technology-driven compliance environment. By focusing on automation, simplification, and MSME growth, the budget sets the tone for sustainable economic development.
Contact BusinessRights, we help individuals, startups, and businesses navigate these changes efficiently — from tax filings and GST compliance to company registrations and regulatory support.