Finance Minister Nirmala Sitharaman presented the Union Budget 2026-2027 today, February 1, 2026. This marks her ninth consecutive budget presentation and a historic first for the budget being presented on a Sunday.
The budget focuses on “Yuva Shakti” (youth power), infrastructure, and simplifying the tax regime. Here are the key highlights and announcements from the speech:
1. Key Economic Numbers
- Fiscal Deficit: Targeted at 4.3% of GDP for FY 2026-27 (down from 4.4% in the revised estimates for FY26).
- Capital Expenditure (Capex): Increased to ₹12.2 lakh crore (up from ₹11.2 lakh crore), continuing the government’s aggressive push on infrastructure.
- GDP Growth: The Economic Survey projects growth at 6.8%–7.2% for FY27.
2. Taxation (Personal & Corporate)
A major overhaul was announced with the New Income Tax Act set to come into effect from April 1, 2026, aiming to simplify rules and returns.
- TCS (Tax Collected at Source) Relief:
- TCS on foreign tour packages reduced from 5%/20% to a flat 2% (no minimum threshold).
- TCS on education remittances/loans removed or reduced to ease the burden on students studying abroad.
- TCS threshold raised from ₹7 lakh to ₹10 lakh.
- Corporate Tax: Minimum Alternate Tax (MAT) reduced to 14% (from 15%).
- Senior Citizens: Tax deduction limit doubled to ₹1 lakh.
- Customs Duty:
- Duty cut on 36 life-saving drugs.
- Reduced duties on Lithium-ion battery components and cobalt powder to boost EV manufacturing.
3. Infrastructure & Industry
- High-Speed Rail: 7 new high-speed rail corridors announced, including routes like Mumbai–Pune, Pune–Hyderabad, and Hyderabad–Bengaluru.
- Rare Earth Corridors: To be established in Odisha, Kerala, Andhra Pradesh, and Tamil Nadu to secure critical mineral supply chains.
- Chemical Parks: Proposal to set up 3 dedicated chemical parks in every state under a plug-and-play model.
- Semiconductors: Launch of India Semiconductor Mission (ISM) 2.0 with an outlay of ₹40,000 crore.
4. Education & Employment (“Yuva Shakti”)
- AVGC Sector: To meet the demand for creative professionals, AVGC (Animation, Visual Effects, Gaming, Comics) Content Creator Labs will be set up in 15,000 secondary schools and 500 colleges.
- Service Sector Push: A high-powered “Education to Employment” committee will be formed to drive job creation in the service sector, aiming for India to hold a 10% share of global services by 2047.
5. Health & Agriculture
- Health: Establishment of NIMHANS-2 (National Institute of Mental Health and Neurosciences) to improve mental healthcare access in North India.
- Agriculture: New promotion schemes announced for high-value crops like coconut, cashew, and cocoa.
6. Market Reaction
- Stock Markets: Special trading session was held today (Sunday).
- Commodities: Gold and Silver prices saw a sharp decline leading up to and during the budget presentation due to global cues and duty adjustments.
