What did Budget 2026-27 change for service exporters in India?

Union Budget 2026-27 was presented on 1 February 2026, and the Finance Act, 2026 (No. 4 of 2026) received assent on 30 March 2026.³¹ It was the first Budget for the Income-tax Act, 2025, which applies from 1 April 2026.

Most Budget headlines were about goods, customs and investment. This page picks out only the changes that affect Indian service exporters (freelancers, agencies, consultants, IT and SaaS companies), each traced to the Finance Act, the Memorandum or the speech. FEMA rules come from RBI; for those, see RBI and DGFT changes for exporters.

What are the Budget 2026-27 changes for service exporters?

The Budget 2026-27 changes for service exporters are the omission of the intermediary place-of-supply rule, a 31 August return due date for non-audit business and professional cases, a longer window for revised returns, and announcements on IT services safe harbour.¹²³

Each row is explained in the sections below.

Who do the Budget 2026-27 changes apply to?

The Budget 2026-27 changes apply to service exporters who file income tax returns, to Indian intermediaries arranging supplies for foreign clients, and to IT services companies with foreign group billing.¹³

Which row fits you depends on your income, audit status and the kind of service you provide.

When did each Budget 2026-27 change take effect?

Each Budget 2026-27 change took effect on a different date: 1 March 2026 for the 1961 Act amendments, 30 March 2026 for the intermediary rule and 1 April 2026 for the 2025 Act amendments.¹²

Section 1(2) of the Finance Act lists sections that start on 1 April 2026 or on a notified date, and section 157 is in neither list, so it applied from enactment.¹

What return deadlines apply after Budget 2026-27?

After Budget 2026-27, the return due date is 31 August of the year after the tax year for business or professional income whose accounts are not required to be audited, and for partners of such firms; for any other assessee it is 31 July.¹

• Income-tax Act, 2025: section 66 of the Finance Act substitutes the due-date table in section 263(1)(c) of the Income-tax Act, 2025.¹
• Income-tax Act, 1961: from 1 March 2026, section 5 of the Finance Act, 2026 amended section 139 of the 1961 Act with the same due-date structure, so the 31 August date also applies to returns still filed under the 1961 Act.¹ The Memorandum says the corresponding 1961 Act amendments take effect from 1 March 2026.²
• Revised returns: section 66 also substitutes section 263(5): a revised return may be filed within twelve months from the end of the relevant tax year, or before assessment is completed, whichever is earlier, subject to section 428(b).¹
• Updated returns: section 66 also lets an updated return be filed where it reduces a loss returned on time, and in response to a reassessment notice under section 280.¹

For example, a designer or consultant using presumptive taxation, who is not under audit, falls in the 31 August row.¹ See section 44ADA's new number and ITR form for freelancers. Ask your chartered accountant which Act and form apply to the year you are filing.

What happens if a service exporter gets a return wrong after Budget 2026-27?

A service exporter who gets a return wrong can file a revised return within twelve months from the end of the tax year, or before assessment is completed, whichever is earlier.¹ The Memorandum explains that this gives people who file a belated return at the end of the period a chance to revise it, and that a fee is proposed for revised returns filed beyond nine months from the end of the tax year.²

• Late revision: a revision after nine months may attract the proposed fee.²
• Loss returned on time: an updated return can now be filed where it reduces that loss.¹
• Reassessment notice: an updated return can also be filed in response to a notice under section 280.¹

Revising early keeps you inside the nine-month window the Memorandum describes.²

How did Budget 2026-27 change GST for intermediary services?

Budget 2026-27 changed GST for intermediary services by omitting clause (b) of section 13(8) of the IGST Act, 2017 through section 157 of the Finance Act, 2026, from 30 March 2026.¹ The Budget speech annexure explains the effect: the place of supply for intermediary services is now determined by the default rule in section 13(2), which for a supplier or recipient outside India is the location of the recipient.³

This matters to Indian agents, brokers, sourcing agents and others who arrange supplies for foreign clients. Before the change, their place of supply was in India, so their services could not qualify as exports. See intermediary services under GST.

Note: Other GST amendments in the Finance Act, 2026, including changes to refunds under section 54 of the CGST Act (sections 153 to 155), come into force only on a date the Central Government notifies.¹ Check the GST notifications before relying on them.

What did the Budget 2026-27 speech announce for IT services companies?

The Budget 2026-27 speech of 1 February 2026 announced four measures for IT services companies:³

The speech also proposed to fast-track unilateral Advance Pricing Agreements for IT services, aiming to conclude them within two years (extendable by six months on request).³ These measures matter mainly to Indian subsidiaries billing foreign group companies. Safe harbour margins sit in the Income-tax Rules, so confirm the notified rule before applying it. See transfer pricing for Indian subsidiaries.

What did the Budget 2026-27 speech announce for the services sector generally?

The Budget 2026-27 speech announced a High-Powered "Education to Employment and Enterprise" Standing Committee focused on the services sector, with an aim of a 10% global share in services by 2047.³ Its indicative terms of reference include identifying services sub-sectors with export potential and examining areas for services export.³ The committee is an announcement with no rule change; no recommendations had been notified as law in the sources reviewed for this page.

Which Finance Act, 2026 sections make the Budget changes for service exporters?

The Budget changes for service exporters are made by sections 1, 5, 66 and 157 of the Finance Act, 2026, published in the Gazette on 30 March 2026.¹

The FEMA (Export and Import of Goods and Services) Regulations, 2026 are an RBI notification and sit outside this list.⁴

What are the common mistakes with Budget 2026-27 changes for service exporters?

The common mistakes with Budget 2026-27 changes are assuming the Budget changed FEMA or zero-rating, relying on announcements before rules are notified, and using the wrong due date.¹³⁴

• FEMA export rules: realisation periods, EDF filing and bank monitoring come from RBI's regulations, and the Finance Act did not change them.⁴
• Zero-rating of exports: the only IGST Act amendment in the Finance Act, 2026 is to section 13, so section 16 on zero-rated supplies is unchanged.¹
• Safe harbour before notification: safe harbour margins sit in the Income-tax Rules, so the 15.5% figure needs a notified rule.³
• CGST refund amendments: sections 153 to 155 start only on a notified date.¹
• Wrong due date: a non-audit freelancer uses 31 August, and other assessees use 31 July.¹

Which of these changes affects you depends on your income, audit status and the kind of service you provide, so confirm your position with a chartered accountant before filing.