The Institute of Chartered Accountants of India (ICAI) has submitted its pre-budget recommendations for the Union Budget 2026-27, focusing on tax changes aimed at simplifying business processes and fostering environmental initiatives.  

The proposals include extending tax neutrality to LLP restructurings, revising TDS (tax deducted) on partners’ remuneration, and incentives for green projects. 

ICAI’s submission covers direct taxation and international tax matters, presenting both broad policy ideas and targeted amendments.  

The institute’s recommendations seek to reduce legal disputes, ease compliance requirements, streamline income-tax regulations, prevent loopholes for tax avoidance, and enhance revenue collection. 

For dispute mitigation, ICAI proposal includes decriminalising certain offences, abolishing dual penalties for a single default, and limiting the processing of returns to basic errors and clear discrepancies. 

The body also recommends that guarantee fees should not be classified as interest when applying limits on interest deductions. 

To reduce compliance loads, ICAI advocates for an annual electronic ledger system for tracking TDS/TCS and advance tax payments and the removal of tax collected at source (TCS) on scrap sales.  

Other proposals include allowing tax deduction only on taxable portions of payments to non-residents—with a chartered accountant’s certification—and exempting transferees paying to a non-resident transferor from needing a tax authorisation number (TAN).  

Regarding anti-avoidance and tax collection, ICAI suggests excluding futures & options trades and speculative businesses from presumptive taxation rules, making joint taxation available to married couples by choice, and introducing mandatory audits where profit-linked deductions are claimed.  

On amending the income-tax law framework, recommendations cover raising the surcharge threshold and extending deductions under the default regime for medical insurance premiums and care of dependents with disabilities.  

ICAI president Charanjot Singh Nanda said: “ICAI has always been at the forefront of nation building and continues to work closely with the Government as its trusted knowledge partner. Through our Pre-Budget Suggestions for 2026-27, we aim to support a tax ecosystem that promotes ease of doing business, drives sustainable growth and strengthens India’s journey towards a resilient and green economy”. 

The government had previously considered ICAI’s recommendations during its review of the Income-tax Act, 1961 and the drafting of the upcoming Income-tax Act, 2025—which is set to take effect from 1 April 2026. 

Additionally, ICAI released the results from its September 2025 chartered accountancy examinations. 

Of those sitting the Final exam (81,852 candidates), a pass rate of 16.23% was recorded for both groups.  

The Intermediate exam admitted 159,779 candidates with a pass percentage of 10.06%. The Foundation exam saw 112,287 participants with a combined pass rate of 14.78%. 

Meanwhile, the Indian government is reportedly preparing changes to the Chartered Accountants Act of 1949 that would ease existing restrictions on advertising for chartered accountants and their firms.