Union Budget View for 2026-2027

Finance Minister Nirmala Sitharaman presented the Union Budget for 2026-27 on February 1, 2026. This was her ninth consecutive budget, centered around the theme of "Viksit Bharat" (Developed India) and a transition from "reforms to results."

 

The budget total is pegged at ₹53.5 lakh crore, with a clear focus on manufacturing, infrastructure, and the "Champion MSME" initiative.

 

Taxation & Personal Finance

 

The budget introduced the New Income Tax Act, 2025, which streamlines previous laws.

 

Income Tax Slabs: There were no changes to the income tax slabs this year. The tax-free limit remains at ₹12 lakh (taxable income) under the New Regime due to the rebate under Section 87A.

 

Standard Deduction: Remains at ₹75,000 for salaried individuals.

 

TCS Reductions: 

 

Overseas Tour Packages: Reduced from 5%/20% to a flat 2% with no minimum threshold.

 

Education & Medical: TCS on foreign remittances for these purposes reduced from 5% to 2%.

 

Securities Transaction Tax (STT): A "shock" for traders; STT on Futures was hiked to 0.05% and on Options to 0.15%.

 

Infrastructure & Economy

 

The government continues its heavy lifting on capital expenditure to drive growth.

 

Capital Expenditure (Capex): Increased by 9% to ₹12.2 lakh crore for FY27.

 

Fiscal Deficit: Target narrowed to 4.3% of GDP (down from 4.4% in the previous year).

 

High-Speed Rail: 7 new corridors were proposed, including Mumbai-Pune, Pune-Hyderabad, and Delhi-Varanasi.

 

Dedicated Freight Corridor (DFC): A new East-West corridor connecting Dankuni (West Bengal) to Surat (Gujarat) was announced.

 

Manufacturing & Innovation

 

Semiconductors: Launch of ISM 2.0 (India Semiconductor Mission) to strengthen supply chains and domestic IP.

 

Biopharma SHAKTI: An outlay of ₹10,000 crore to make India a global hub for biologics and biosimilars.

 

Rare Earth Corridors: Established in Odisha, Kerala, Andhra Pradesh, and Tamil Nadu to secure critical minerals for tech and defense.

 

SME Growth Fund: A ₹10,000 crore fund to create "Champion MSMEs" that can compete globally.

 

Agriculture & Social Sector

 

Bharat-VISTAAR: A new multi-lingual AI tool to support farmers with real-time data.

 

Education: Setting up a high-powered "Education to Employment and Enterprise" standing committee and 15,000 new AVGC (Animation, Visual Effects, Gaming, and Comics) labs in schools.

 

Healthcare: 5 new Regional Medical Hubs for medical tourism and 3 new All India Institutes of Ayurveda.

 

Key Takeaway: 

 

The 2026 Budget doubles down on domestic manufacturing (Semiconductors, Biopharma) and infrastructure (Rail, Freight) while keeping personal income tax stable but making international travel and stock market trading slightly more expensive.

 

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