Based on the additional details emerging from the budget documents and the Finance Minister’s speech, here is a more granular breakdown of the Union Budget 2026-2027 announcements:
1. Personal Finance & Taxation: The “Ease of Paying” Push
The New Income Tax Act, effective April 1, 2026, focuses heavily on procedural relief rather than just rate cuts.
- TCS (Tax Collected at Source) Reset:
- Foreign Travel: The aggressive 20% TCS rate has been scrapped. A flat 2% TCS now applies to all overseas tour packages, regardless of the amount.
- Education & Medical: TCS on remittances for education and medical treatment is also standardized at 2%, significantly lowering the upfront cost for families.
- Compliance Changes:
- Staggered Filing: To prevent the July 31st website crash, the FM proposed a “staggered” filing timeline based on income categories, though the final deadline remains July 31.
- Revision Window: Taxpayers can now revise their returns up to March 31 of the assessment year (extended from Dec 31) by paying a nominal fee, reducing the fear of error.
- Accident Compensation: Interest awarded by Motor Accident Claims Tribunals is now fully exempt from income tax.
2. Infrastructure: The “Diamond Quadrilateral” 2.0
The announcement of 7 New High-Speed Rail (HSR) Corridors is the centerpiece of the infrastructure push, aiming to create “economic commute zones.”
- The 7 Corridors:
- Mumbai – Pune: Travel time to drop to <90 minutes.
- Pune – Hyderabad: Unlocking the IT corridor.
- Hyderabad – Bengaluru: Connecting the two biggest tech hubs.
- Hyderabad – Chennai: Boosting manufacturing logistics.
- Chennai – Bengaluru: Enhancing the industrial corridor.
- Delhi – Varanasi: A spiritual and tourism link.
- Varanasi – Siliguri: A strategic gateway to the North East.
- Execution Strategy: Unlike the Japanese-funded Mumbai-Ahmedabad line, these will primarily use domestic funding and the indigenous Vande Bharat Bullet technology to control costs.
3. Technology: India Semiconductor Mission (ISM) 2.0
With an outlay of ₹40,000 crore, ISM 2.0 shifts focus from “assembly” to “independence.”
- Upstream Focus: Incentives are now targeted at producing semiconductor-grade gases, chemicals, and equipment within India, reducing reliance on foreign supply chains.
- Rare Earth Corridors: To support this, dedicated mining and processing zones for rare earth elements (critical for chips and EV magnets) will be set up in Odisha, Kerala, Andhra Pradesh, and Tamil Nadu.
- Market Impact: Stocks like CG Power and Tata Elxsi jumped up to 5% during the special Sunday trading session, while assembly-focused players saw profit booking.
4. Health & Wellness: Integrating Modern & Traditional
- Mental Health: A new National Institute of Mental Health and Neurosciences (NIMHANS-2) will be established in North India (likely near the NCR region) to bridge the regional gap in mental healthcare.
- Ayush Expansion:
- 3 New All India Institutes of Ayurveda to be set up.
- Caregiver Force: A new scheme to train 1.5 lakh caregivers specifically in Yoga and Ayurveda therapies to serve the global medical tourism market.
- 5 Regional Medical Tourism Hubs identified to streamline visa and treatment processes for international patients.
5. Fiscal Discipline
Despite the populism of tax cuts, the government adhered to strict fiscal consolidation:
- Fiscal Deficit Target: Set at 4.3% for FY27.
- Gross Borrowing: Pegged at ₹17.2 lakh crore, a figure that bond markets received positively as it suggests the government will not crowd out private borrowers.
Your Next Step
Since the TCS reduction to 2% is effective immediately (April 1, 2026), if you have any international travel or university fee payments planned for this summer, would you like me to help you calculate how much liquidity this frees up compared to the old 20% rule?