Union Budget 2026–27 Tabled at ₹53.47 Lakh Crore, 7.7% Increase YoY

Union Finance Minister Nirmala Sitharaman on Sunday presented the central budget for 2026–27 at ₹53.47 lakh crore , marking a 7.7% increase over the current financial year. Revised estimates for 2025–26 put the budget at ₹49.64 lakh crore, lower than the ₹50.65 lakh crore projected in February last year. In 2024–25, the budget stood at ₹46.52 lakh crore.

For 2026–27, total government expenditure is estimated at ₹53.47 lakh crore , with non-debt receipts projected at ₹36.5 lakh crore and net tax revenue at ₹28.7 lakh crore. To bridge the fiscal deficit, net market borrowings through dated securities are projected at ₹11.7 lakh crore, with the remaining funds mobilised through small savings schemes and other sources. Total market borrowings are estimated at ₹17.2 lakh crore.

The government expects to achieve the fiscal deficit target of 4.4% of GDP for the current year. For 2026–27, the fiscal deficit is projected at 4.3% of GDP , or ₹16.95 lakh crore , while the country’s GDP is estimated to exceed ₹393 lakh crore , a 10% increase over 2025–26 advance estimates. Sitharaman emphasised that the government is maintaining fiscal discipline while ensuring no shortfall in meeting social needs. The debt-to-GDP ratio is projected at 55.6% , down from 56.1% in 2025–26, aligning with the target of 50±1% by 2030–31 .

The Finance Minister announced that the Income Tax Act–2025 will come into effect from April 1 , replacing the six-decade-old 1961 Income Tax Act . Rules and ITR forms will be notified soon. The new law is revenue-neutral with no change in tax rates, simplifies compliance, reduces sections by roughly 50% , and replaces the assessment year–previous year system with a single “tax year” method. It also allows TDS refunds without penalties for late filings.

Sitharaman proposed extending the deadline for revised ITRs from December 31 to March 31 with a nominal fee, and introducing an automated rule-based process for small taxpayers. Awards from Motor Accident Claims Tribunals will be exempt from income tax. Income from share buybacks will be subject to capital gains tax , while Securities Transaction Tax (STT) on commodity futures will rise from 0.02% to 0.05% . Minimum Alternate Tax (MAT) will be treated as final tax, with the rate reduced from 15% to 14%. A joint committee will incorporate accounting and disclosure standards, and the National Destination Digital Knowledge Grid will digitally record key locations.

The budget provides relief for citizens on foreign travel and medical expenses . TCS on foreign tour packages has been reduced to 2%, and the same applies to LR scheme remittances for overseas education and medical treatment. Basic customs duty has been waived on 17 cancer and critical disease drugs, with seven more rare disease medicines and special dietary imports also duty-free. Customs duty exemptions were announced for solar glass components, nuclear power projects until 2035, civil aircraft parts, and certain microwave oven components. Personal imports for travelers will see customs duty cut from 20% to 10%, while export deadlines for textile and leather sectors have been extended from six months to one year.

However, STT on stock market futures and options has been increased from 0.02% to 0.05%, and TCS on alcohol, minerals, and scrap from 1% to 2% . Excise duty on chewing tobacco and gutkha has been raised from 25% to 60% , though actual burden will be capped at 25% .

The government allocated ₹95,692.31 crore to the new VB-G RAM G scheme, guaranteeing 125 days of work annually and gradually replacing MGNREGA over two years. The MGNREGA budget for 2025–26 was ₹88,000 crore, with an initial allocation of ₹86,000 crore. The total Rural Development Ministry budget is ₹1,94,368.81 crore, a 3.5% increase over last year. Other major schemes include PMGSY ₹19,000 crore, DAY-NRLM ₹19,200 crore, and PMAY-G ₹54,916.70 crore. Additional allocations of ₹55,990 crore to Panchayats have been made based on the 16th Finance Commission, potentially taking VB-G RAMJI’s total expenditure to ₹1,51,000 crore with central-state coordination.

Following the STT hike, Sensex fell 2,370.36 points (2.88%) to 79,899.42 , while Nifty dropped 748.9 points (2.95%) to 24,571.75 . Financial analysts suggested that the STT increase may slightly affect FPIs, particularly high-frequency and derivative-based global funds.