Budget 2027, what Indian founders should prepare for.

Union Budget each year is presented on 1 February and most provisions take effect either from 1 April of that year (next FY) or in some cases retrospectively or from the date announced. In rare cases, provisions apply from Budget-day with specific grandfathering clauses.

For founders, NRIs, and HNIs with discretionary transactions planned in the Jan-Mar window, Budget timing matters:

• Transactions closed BEFORE 1 February: subject to the then-current regime (pre-Budget).
• Transactions closed AFTER 1 February but before 31 March: subject to current regime unless Budget specifically applies to the current FY (common for FM-flagged urgent measures).
• Transactions in the next FY (post-1 April): subject to the new Budget provisions.

Smart founders complete planned transactions (asset sales, flip execution, buyback, large distribution) by 15 January to safely stay under the current regime. Delaying to Feb-Mar carries Budget-change risk.

Based on current public discourse and past Budget patterns, these are areas Budget 2027 may address:

Capital gains: Finance Act 2024 unified LTCG at 12.5% without indexation. Budget 2027 could further tweak rates, exemption threshold (currently INR 1.25 lakh), or indexation availability for specific asset classes. Grandfathering of pre-July-2024 assets is unlikely to be disturbed but monitor.

Startup incentives: Section 80-IAC (eligible startup tax holiday) continues under current law. Section 56(2)(viib) angel tax abolished for all investors April 2024. Watch for potential extensions / tightening of DPIIT eligibility criteria.

LRS and TCS: 20% TCS on LRS above INR 10 lakh under Section 206C(1G) could be revisited. Industry has sought threshold increase or rate reduction. No commitment but monitor.

GIFT City IFSC: Section 10(4D) + Section 80LA regime likely to be extended / expanded. Possible new carve-outs for additional qualifying income categories.

Direct Taxes Code (DTC): periodically rumoured. If introduced, would be a structural rewrite - watch for any formal introduction timeline.

Buyback tax: shareholder-level taxation effective October 2024. Industry has sought partial rollback for genuine buy-and-cancel transactions. Monitor.

Section 194R / 194T: TDS on business perquisites + partnership-firm payments. Rate or threshold tweaks possible.

1. Capital gains transactions: if you plan to sell appreciated unlisted equity, property, or listed-equity blocks, consider closing before 15 January 2027 under the known 12.5% LTCG regime.
2. Flip to Delaware: if US VC is in your 24-month plan and current FMV is low, close the flip before Budget 2027 under current regime. Avoids any surprise Section 2(47) rate change on cross-border share-swap.
3. Buyback: if a buyback is planned to deliver cash to shareholders, model whether to execute before 1 April 2027 under current shareholder-level regime vs await potential Budget relief (not guaranteed).
4. DPIIT recognition: file DPIIT application now if eligible — Section 80-IAC claim is on recognition date, so earlier filing locks in the current eligibility criteria.
5. LRS remittances: if planned for FEMA ODI / overseas investment, consider spreading across FY 2025-26 and FY 2026-27 to use both years' INR 10 lakh TCS thresholds.
6. Section 54 reinvestment: if you sold property in FY 2025-26 and are claiming Section 54 reinvestment, make sure reinvestment is completed per prescribed timelines (purchase 2 years / construction 3 years) — Budget 2027 could tweak conditions.
7. GIFT City fund setup: if planning AIF Category II/III at IFSC, start IFSCA FME licensing now; Section 10(4D) current scope locked in via existing framework; Budget 2027 may add more.
8. Review ITR AY 2026-27: for audit cases, 31 October 2026 deadline is approaching. File on time to avoid Section 234A interest + Section 234F fee.

Each year, pre-Budget rumours cover: estate duty reinstatement, wealth tax reinstatement, STT abolition, LTCG rate increase to 20%+, GST merger with Income Tax, abolition of indexation across all asset classes, retrospective tax changes.

Historical pattern: most of these do NOT come true. Governments typically make incremental changes with grandfathering, not structural reversals. Plan on marginal tweaks, not revolution.

But: do not transact on the assumption that nothing will change. Finance Act 2024 did introduce substantial LTCG restructure (indexation removal, rate unification) — the first big structural change in a decade. Budget 2027 could do similar if political window exists.

• By 31 October 2026: file audit-case ITR AY 2026-27.
• By 30 November 2026: file transfer-pricing-case ITR AY 2026-27.
• By 31 December 2026: file belated / revised ITR AY 2026-27 (last chance for FY 2025-26).
• By 15 January 2027: close any pre-Budget-sensitive transactions (flips, asset sales, buyback, large distributions).
• 1 February 2027: Union Budget presentation. Monitor live.
• By 15 March 2027: review Budget provisions in detail. Advance tax 4th installment deadline for FY 2026-27.
• 31 March 2027: FY 2026-27 close. Use remaining LRS limits, Section 80C deductions, Section 54EC reinvestment windows.

Scoping call: book a pre-Budget 2027 planning call with BQP in Nov-Dec 2026 to map your specific transactions. Last updated: 2026-10-09.