UNION BUDGET 2026-2027

Kartavya 1

Accelerating & Sustaining Economic Growth

• Manufacturing push across biopharma, semiconductors, electronics, chemicals, textiles & capital goods.
• Biopharma SHAKTI: ₹10,000 cr over 5 years.
• Electronics manufacturing: ₹40,000 cr outlay.
• Public capex: ₹12.2 lakh cr in FY 2026-27.
• Logistics boost via freight corridors, waterways & coastal shipping.

Investment-led growth with global competitiveness

Kartavya 2

Building Capacity & Aspirations of People

• Education-to-Employment focus for services sector
• 100,000+ Allied Health Professionals to be added in 5 years
• 5 Regional Medical Hubs for medical tourism
• AVGC & creative economy expansion in 15,000 schools & 500 colleges
• Tourism, heritage & sports ecosystem strengthening

Human capital as the growth multiplier

Kartavya 3

Sabka Saath, Sabka Vikas

• Higher farmer incomes via high-value agriculture & Bharat-VISTAAR (AI-driven AgriStack)
• Empowerment of Divyangjan through skill-based employment schemes
• Strengthened mental health infrastructure including NIMHANS-2
• Focus on Purvodaya & North-East with industrial corridors, tourism & e-mobility

Targeted inclusion with regional balance

Fiscal & State Focus

Strengthening Foundations for Growth

• Fiscal deficit: 4.3% of GDP (FY 2026-27)
• Debt-to-GDP: 55.6%
• Finance Commission grants to States: ₹1.4 lakh cr
• Incentives for municipal bonds >₹1,000 cr issuance
• Reforms in banking, NBFCs & FEMA framework proposed

Vision backed by numbers. Execution backed by reform.

New Income Tax Act

Ease of Living -Investment PushNew Income Tax Act, 2025 -

• To come into force from April 2026
• Simplified IT Rules & redesigned Forms for easier compliance

Key Reliefs -

• Interest awarded by MACT to individuals made fully tax-exempt
• TDS on MACT interest abolished
• Time for revising returns extended till 31 March (with nominal fee)
• Single-window Form 15G / 15H filing via depositories

Lower compliance burden for ordinary taxpayers

TDS–TCS

Rationalisation & Penalty Relief
TCS Rationalisation -

• Overseas tour packages: 2% (earlier 2–20%)
• LRS (education & medical): 2% (earlier 5%)

Simplified TDS

• Manpower supply rules eased for labour-
• intensive businesses.
• Automated lower / nil TDS certificate for small taxpayers

Penalty & Prosecution

• Integrated assessment + penalty orders
• Return updates allowed even after reassessment (with +10% tax)
• Immunity from prosecution for foreign assets < ₹20 lakh

Boost to IT Sector & Global Investments

IT Sector Support

• IT, ITeS, KPO & contract R&D clubbed under IT

Services

• Safe Harbour margin: 15.5%
• Threshold increased from ₹300 cr → ₹2,000 cr
• Safe harbour validity: 5 years
• Faster APA timeline: 2 years (+6 months)

Global Investment Incentives

• Tax holiday till 2047 for global cloud services using Indian data centres
• Safe harbour 15% cost-plus for related data centre entities
• 5-year tax exemption for non-resident experts & toll manufacturer, MAT exemption for non-residents under presumptive taxation

Indirect Taxes, Customs & Exports

Indirect Tax & Customs Reforms

• Personal import duty cut from 20% → 10%
• 17 medicines fully exempt from customs duty
• Duty exemptions for lithium-ion cells, solar glass & critical minerals
• Nuclear project duty exemption extended till 2035

Trade & Exports

• Removal of ₹10 lakh cap on courier exports
• Fish catch in EEZ / High Seas treated as duty-free exports
• Faster clearance via single digital window & AI-based scanning