Union Budget 2026 Highlights: STT bombshell rattles market - Sensex, NIFTY nosedive over 2%, worst fall in 7 years

Prof. Dr. Parin Somani, CEO: London Organisation of Skills Development (LOSD)

A strategic thrust of Budget 2026 is the emphasis on domestic manufacturing and value chain resilience. Initiatives to expand semiconductor capacity, biopharma ecosystems, and critical industrial corridors position India as a global competitive hub.

These moves signal to the world and to Indian innovators that the country is committed to building homegrown capabilities in technologies and industries of the future. They also inspire a new generation of engineers, researchers, and industrialists to lead India toward self-reliance, global competitiveness, and high-skilled employment.

I see the renewed push for domestic manufacturing and strategic value chains as a defining step towards a self-reliant and globally competitive India. This is not just policy; it is a call to action for Indians to contribute to a self-sustaining economic transformation.

Dr Lubna Kamal, Homeopathic Nephrologist, Nano Homeopathy Institute of Research and Welfare

The Union Budget once again overlooks homeopathy, despite its proven role as one of the most affordable and least side-effect–prone systems of medicine. In a country where out-of-pocket healthcare expenditure pushes millions into poverty, homeopathy offers safe, low-cost, long-term care—especially for chronic diseases. Yet, budgetary representation remains symbolic rather than substantive, with no clear roadmap for research expansion, institutional strengthening, or integration into public health delivery. Recognising homeopathy meaningfully is not about favouring one system over another; it is about embracing cost-effective healthcare solutions that align with India’s preventive and inclusive health goals.

N. Nagabushana Reddy, CEO, Founder & Managing Director – NBR Group

“The post-Budget environment for real estate remains constructive and balanced. By prioritising infrastructure development, fiscal prudence, and economic expansion, the government has ensured that the broader drivers of housing demand remain intact. For developers, stability in raw material prices, interest rates, and regulatory frameworks is more important than short-term incentives, and this Budget provides that continuity. The construction sector will particularly benefit from increased public spending on connectivity projects, as these create new residential micro-markets and improve accessibility to existing ones. Additionally, measures that strengthen disposable incomes and encourage entrepreneurship will gradually translate into stronger homebuyer sentiment. We believe the organised real estate segment is well positioned to capitalise on these trends. Projects that focus on sustainable planning, customer-centric design, and timely execution will continue to see robust demand. This Budget sets the stage for steady, responsible, and long-term growth for the entire real estate industry.”

Dr. Sachidanand Upadhyay, MD & CEO, Lord's Mark Industries Ltd.

“By announcing Biopharma Shakti with a ₹10,000-crore commitment, Budget 2026 reinforces India’s shift towards scaled manufacturing and research-led growth. The boost to biopharma and medical devices comes at a crucial moment for capacity expansion and domestic value creation. Coupled with sustained semiconductor and electronics incentives, the Budget lays the groundwork for a robust ecosystem supporting advanced diagnostics, med-tech, and digital health. These interventions strengthen India’s trajectory toward becoming a high-value, innovation-centric global manufacturing hub.”

Zubin Karkaria, CEO of VFS Global.

The Union Budget charts a strong roadmap to Vision 2047, positioning tourism, mobility, and human capital as engines of long-term growth. By recognising tourism as a catalyst for jobs, foreign exchange, and regional development, the government is building a more competitive and resilient travel ecosystem.

The emphasis on capacity building is encouraging with measures towards infrastructure development, skill enhancement, and institutional support that will help strengthen service quality, destination readiness, and ease of doing business. Initiatives like the National Institute of Hospitality, upskilling of tourist guides, and the National Destination Digital Knowledge Grid will have an enduring impact in the long-term.

Sustainable, heritage, and experiential tourism, along with support for medical tourism hubs, will diversify India’s offerings, while reductions in TCS on overseas tour packages and TDS under the Liberalised Remittance Scheme for education will ease financial pressure on Indian travellers and students, boosting global mobility and connectivity.

Kusal Roy, Managing Director & Chief Executive Officer, Jio Credit Limited:

"The FM is to be congratulated for delivering a budget that focuses on bolstering the SME sector in particular, and manufacturing sector in general. There is a clear push to promote Make-in-India and derisking our economy from the impact of tariffs.

The Hon'ble Finance Minister has announced substantial incentives for seven critical manufacturing sectors including pharmaceuticals, semiconductors, rare-earths, chemicals, capital goods, tool-production, container manufacturing and the textile sector. In addition, rejuvenation of 200 legacy industrial clusters will also provide a strong fillip to industries. There will also be dedicated focus on developing infrastructure for cities with a population over 500,000, and creation of a fund pool of Rs. 5,000 crore per City Economic Region (CER). The FM has also taken steps to upgrade TREDS by providing credit guarantee support, a move that will enhance confidence for SMEs on TREDS.

Overall, from the point of view of the NBFC sector, I expect this progressive Budget to have a positive impact on credit demand from SMEs and manufacturing sectors. In addition, there will be substantial employment generation and infrastructure creation in the CERs, which will further encourage offtake in retail credit."

Basesh Gala, Founder CEO, 39 Solutions

The Union Budget 2026 is a fair, simple, and largely no-surprises budget that continues the positive momentum in Direct Tax and GST simplification seen over the past year.

I welcome the strong ‘Future Ready’ focus, particularly the ₹10,000 crore allocations for BioPharma and the new MSME Growth Fund, alongside a clear push for semiconductors and cloud infrastructure. These measures signal where MSMEs should align next.

That said, while filing may be simpler, true ease of compliance remains missing. Increased AI-led scrutiny has made compliance harder for salaried taxpayers and MSMEs. Technology must reduce burden and anxiety, not amplify it overall.

Ravi Narayanan, MD & CEO, SMFG India Credit

“The Union Budget 2026 outlines a constructive roadmap for strengthening India’s financial system, with emphasis on stability, inclusion, and growth. The proposed High-Level Committee on Banking and SME Growth Fund signal strong support for NBFCs and MSMEs. Reforms in credit transmission, technology adoption, and FEMA regulations will improve efficiency and access to global capital, enabling NBFCs to scale responsibly and advance India’s journey towards Viksit Bharat.

Aaron Kamath, Co-Lead - Technology, Digital Media and Commercial Law Practice at Nishith Desai Associates

In a significant move to position India as a global data centre and cloud services hub, the government has proposed a tax exemption until 2047 for foreign companies on income arising in India from procuring data centre services from specified Indian facilities. The condition is that services to Indian users are to be routed by the foreign company through Indian resellers. This long-horizon incentive is expected to materially improve India’s competitiveness in the global data infrastructure market, catalyse large-scale investment in data centres and AI infrastructure, drive employment and encourage greater access for Indian customers to a wider range of global service providers.

A broad-based re-rating in defence stocks is unlikely immediately after the Union Budget 2026, even as the government announced an increase in defence spending. Experts believe that any meaningful re-rating in the segment hinges on execution over the next few quarters. Read More

Aakash Jugraj Founder, Shivaksh Media Group

This budget is designed from the perspective of someone who represents both AI innovation and the media ecosystem. Media today is not just about visibility, it is about intelligence, narrative control, and responsible scale. Every cost mentioned here is aligned with strategic output, not random execution. As a media intelligence professional, I ensure that budgets are structured to deliver credibility, reach, and long-term brand positioning. This quote reflects experience, industry understanding, and execution discipline rather than experimentation.

Nikita Mishra, Founder, The Broadcast Media

Union Budget 2026 reflects India’s clear intent to balance economic growth with narrative responsibility. From infrastructure and manufacturing to AI-driven governance, this budget signals a shift toward long-term national positioning rather than short-term announcements. As media professionals, it becomes our responsibility to interpret policy with clarity, accuracy, and public relevance. Budget 2026 gives communicators an opportunity to translate complex economic decisions into understandable narratives for citizens, businesses, and institutions. Strong policy needs equally strong media framing, and this budget provides the foundation for informed dialogue and national confidence.

Rustom Kerawalla, Founder and Chairman of the VIBGYOR Group of Schools, believes that this Union Budget 2026, education policy must shift decisively from expansion to excellence. Technology is no longer optional; it is fundamental to improving learning outcomes through digital classrooms, data-driven instruction and AI-enabled personalised learning. The Budget’s focus on digital infrastructure, continuous teacher upskilling and sustained public funding must now translate into effective, outcome-driven implementation. Anchored in the National Education Policy, this approach can strengthen quality, accelerate innovation and enhance India’s global competitiveness in education.

Vivek Surve, Founder, Oreo One Digital and Political Strategist

The Union Budget’s focus on the Orange Economy reflects a timely recognition of India’s creative potential. By supporting sectors such as animation, gaming, AVGC, design, and digital content, the government is aligning cultural capital with economic growth. The real impact, however, will depend on how effectively policy intent is translated into skill development, access to financing, and global market integration.

Dheeraj Hinduja, Chairman, Ashok Leyland

“The Finance Minister has presented a pro-growth, development-focused Budget aligned with the Prime Minister’s vision of a competitive, resilient, and self-reliant India. Increased spending on Infrastructure, Manufacturing, and Defence—along with continued emphasis on roads, logistics, and construction—is expected to accelerate economic growth and drive demand in the commercial vehicle sector. The Budget also advances initiatives in AI, rare earths, and energy transition while supporting key sectors such as healthcare, education, agriculture, housing, and electrification. Overall, it sustains growth momentum and strengthens India’s long-term economic trajectory.”

Jatin Mahajan, President, Association of Diagnostics Manufacturers of India (ADMI)

“The announcement of Biopharma Shakti, supported by an allocation of ₹10,000 crore, is a strong and timely step toward strengthening India’s healthcare manufacturing ecosystem. Its focus on quality systems, standardisation and global benchmarking will significantly benefit the IVD and MedTech sector by aligning Indian manufacturing with international regulatory standards, thereby enhancing export competitiveness and building greater global trust in Indian healthcare technologies.

Equally encouraging is the Government’s plan to promote chemical and manufacturing parks nationwide. For the diagnostics industry, which still relies heavily on imported raw materials and components, this move can help build domestic supply chains, reduce production costs, and strengthen manufacturing resilience. Over time, such infrastructure development will enable greater indigenous value creation and firmly position India as a global manufacturing hub for diagnostics and medical devices, accelerating both industry growth and healthcare self-reliance.”

Realty shares witnessed profit booking on Budget day, with the sector reacting negatively to the absence of any major policy support for affordable housing.

The Nifty Realty index declined over 2 percent on Friday, erasing all the gains made over the previous four sessions, during which it had risen 2.15 percent. Read More

Sathya Shankar, Chairman and MD, House of Bindu

The Union Budget 2026 sends a positive signal for India’s food and beverage ecosystem, especially for homegrown brands like ours. The focus on improving supply chains, cold storage and logistics directly addresses some of the real, on-ground challenges that F&B startups face while scaling quality products.

As the founder of House of Bindu, operating at the intersection of food innovation and consumer experience, I welcome the government’s push to modernise food systems and encourage value-added agriculture. Better connectivity, support for agri-processing, and efforts to reduce post-harvest losses will make it easier for startups to work closely with farmers, expand our product range, and take Indian food brands to wider markets.

We welcome the proposal to launch Bharat-VISTAAR, a multilingual AI tool that shall integrate the AgriStack portals and the ICAR package on agricultural practices with AI systems for enhancing farm productivity.

The Union Budget 2026-27 serves as a strategic blueprint, balancing aggressive growth with fiscal consolidation to navigate global volatility. For investors, the focus remains on long-term wealth creation rather than short-term trading. With a a strong emphasis on 'Viksit Bharat,' the budget anchors confidence in manufacturing, infrastructure, and green energy as key themes.

Sharda Deepakraj Lala, the Founder and CEO of Siddhantha Wealth Managers, sees the potential rationalization of tax relief as a crucial boost to consumption. The shift to a simplified, technology-driven tax regime encourages compliance and improves disposable income, particularly for the upper-middle-class professional.

The budget rightly places MSMEs at the core of job creation, leveraging AI and robotics to enhance productivity. As per Sharda Deepakraj Lala, the Founder and CEO of Siddhantha Wealth Managers, this is a call to focus on sector-linked opportunities rather than broad, passive investing. In essence, Budget 2026 confirms that India's structural growth story is robust, offering durable returns for disciplined investors positioned to capitalize on systemic infrastructure and technology developments.

The Union Budget 2026 has largely been considered a status quo budget, focusing on policy continuity instead of big-bang measures. However, here are five key sectors that analysts expect to see significant gains going forward. Read More

India as a Platform Economy for Trade

Karanvir Singh

International Trade Economist & Economic Diplomacy Expert | Founder, Connecting Nations

Budget 2026 positions India as a platform economy—enabling trade rather than merely participating in it.

Through Connecting Nations, we work on building such platforms that allow Global South producers to access global markets through Indian systems.

Visionum Global acts as an execution backbone—connecting policy intent with real trade flows.

Platform economies don’t dominate; they enable. India is quietly building that role.

Several domestic banks having presence in International Finance Services (IFSC), Gift City like State Bank of India (SBI) are set to benefit from Budget 2026 announcement on extension of tax sops for International Banking Units (IBUs). Currently, IBUs set up in Gift City can avail tax exemption for 10 within first 15 years of existence in Gift City. Now, the benefit has been extended to 20 years out of first 25 years of setting up shop. Read More

Ajay Mariwala, MD, Food Service India Pvt Ltd (FSIPL)

As an entreprenuer in the food sector, the Union Budget 2025-26 has laid a strong emphasis on strengthening agricultural productivity, supply chains, and market infrastructure, in a move towards enhancing food security and boosting the country’s competitiveness in the food sector. Finance Minister Nirmala Sitharaman stressed on the importance on high-value agriculture, allied sectors and technology-led farming. In her Budget speech, proposing targeted interventions to boost farmer incomes, create rural employment and modernise agricultural practices, all of which will contribute to the growth of organisations as ours and India’s overall food and beverage sector.

Acknowledging MSMEs like Food Service India, as a vital engine of growth, her proposal to introduce a dedicated ₹10,000 crore SME Growth Fund, will create future Champions, incentivizing enterprises based on select criteria. The Self-Reliant India Fund set up in 2021, with ₹2,000 crore will continue to support micro enterprises and maintain their access to risk capital. The Budget had several strands linking the Government e-Marketplace to TReDS to facilitate payments, encouraging SMEs for productivity, formalization and export-readiness. Small and medium-sized enterprises remain the backbone of the Indian economy and society, employing over 110 million people in manufacturing, trade and services and this budget provides a boost to the sector with the announcements.

Dr. P N Arora, Chairman & Managing Director, Yashoda Group of Hospitals

“The Union Budget 2026–27 presents a growth-oriented roadmap to strengthen India’s healthcare ecosystem and position the country as a global hub for medical value tourism. Proposals such as regional medical hubs and new Ayurveda institutes highlight the transformative potential of public-private collaboration across healthcare and allied sectors.

While the ‘Heal in India’ initiative received a strong push in the previous Budget, it finds limited explicit mention this year. We are hopeful that during the rollout and implementation phase, greater emphasis will be placed on strengthening and scaling this important initiative to further advance India’s global healthcare standing.

It is equally encouraging to see a strong focus on workforce development, Biopharma Shakti, upgraded research institutes, and digital health. Coupled with capital investment, structural reforms, AI and robotic surgery, the SME Growth Fund, and Semiconductor Mission 2.0, these measures, in my view, will not only enhance care delivery, drive innovation, and advance healthcare research, but also boost allied industries, foster employment, and build a resilient ecosystem aligned with the vision of a Viksit Bharat.

The reduction of the fiscal deficit to 4% is also a positive signal of fiscal prudence and long-term sustainability, reinforcing confidence in India’s growth trajectory while maintaining macroeconomic stability.”

A bold Budget that combines growth with inclusion. The strong emphasis on skilling, alongside sustained investments in science, innovation, and research are timely & will strengthen domestic capabilities, advancing import substitution in critical sectors.

Bolstering infrastructure and logistics with a focus on energy-efficiency & impetus to data centre ecosystem will further reinforce confidence in our burgeoning digital economy.

Bharti remains highly committed to play its part in enabling technology-led growth, expanding financial inclusion, and accelerating future-ready education through Bharti Airtel Foundation to secure India’s talent dividend.

The focus on Tier II and Tier III cities, including temple-towns, through the city economic regions (CER) development budgetary allocation of Rs 5,000 crore should result in a big boost for tourism in those cities, noted Aloke Bajpai, Group CEO, ixigo. The new Buddhist circuits announced in the FY27 Union Budget will significantly strengthen the development of tourism in the North East, across the states of Sikkim, Manipur, Assam, Arunachal Pradesh, Mizoram and Tripura, further enhancing connectivity and infrastructure in the region, he said. (Read More)

“Amidst geopolitical concerns, fragmentation, and financial tightening across the globe, this year’s Union Budget lays emphasis on the collective strength of Bharat. From domestic manufacturing and infrastructure-led investments to targeted sector-specific reforms and expanding the workforce, these interventions reflect conscious choices—a clear effort to balance macroeconomic priorities with micro-level necessities. This is a Budget anchored in India’s potential and vision of becoming ‘Viksit Bharat’—boosting employment, while combining technologies of the future with India’s legacy industries. This is a push for resilience—to drive long-term, equitable, and sustainable growth backed by a ‘Kartavya’ approach.” -- Sanjeev Krishan – Chairperson, PwC in India

The Union Budget for 2026-27 has allocated Rs 550 crore for the Regional Connectivity Scheme (RCS) titled Ude Desh ka Aam Nagrik (UDAN) which is nearly unchanged from the Rs 540 allocation provided in 2025-26. The revised estimate for 2025-26 is expected to be Rs 434.5 crore, as per details shared in the summary of budget provisions for the Ministry of Civil Aviation. (Read More)

The Department of Economic Affairs Secretary stated the intention to review FEMA regulations to make it easier for global investors to invest in India.

The Finance Minister reiterated that the STT hike is minimal and solely aimed at deterring excessive speculation.

The Finance Minister clarified that the STT increase will apply only to futures and options due to the high speculation and risk involved.

The Finance Minister explained that the recent nominal increase in Securities Transaction Tax (STT) is intended to discourage high-risk speculation, not to oppose it.

The Finance Minister emphasized that India's economic fundamentals remain strong and highlighted new schemes for MSMEs and the textile sector amid global challenges and market volatility.

The Expenditure Secretary clarified that the Rs 30,000 crore allocation in the Budget for MGNREGA is meant to clear carryover liabilities from previous years.

Finance Minister noted that global uncertainties are at a magnitude that India has never experienced before.

Chief Economic Adviser Nageswaran said that the 10% nominal GDP projection is calculated using the existing GDP base year.

The Revenue Secretary said the data centre tax exemption is aimed at ensuring global entities are not discouraged from providing services across India, while domestic partners working with them will continue to be taxed.

The DEA Secretary noted that a decision has been taken to allow Alternative Investment Funds (AIFs) to operate as LLPs and added that FEMA rules will be reviewed to simplify global investment into India.

The Finance Minister clarified that the recent increase in the Securities Transaction Tax (STT) applies only to futures and options, given the high risk and speculative nature of these segments. She emphasized that the hike is nominal and intended primarily to curb excessive speculation.

Budget 2026: Explaining the rationale behind the move, he said the government increased STT on futures and options to address rising systemic risk in the derivatives market, emphasising that it did not want to encourage excessive speculation (Read More)

The Revenue Secretary said all tobacco products are now under the excise framework, a move that has contributed to a 22% increase in the tax mop-up target. The Finance Minister announced that a high-level committee on banking will be constituted to prepare a comprehensive plan for the sector as India moves towards becoming a developed nation by 2047. The committee will examine the full expanse of the banking ecosystem, including future requirements.

The DFS Secretary said the panel will study key aspects such as expansion of the banking network, credit and deposit growth, with the government to decide on follow-up measures based on its recommendations. On critical minerals, the FM said the proposed rare earth corridors are expected to be highly successful.

Market veteran Shankar Sharma has applauded the Government decision to raise Securities Transaction Tax (STT) on derivatives, calling it the most significant proposal of the Budget. In a post on social media platform X, Sharma said excessive participation in derivatives trading has had a corrosive impact on India’s youth and long-term wealth creation. “Derivatives are a poison x cocaine, eating away at the roots of our youth. Its destructive effect will be felt by generations” he wrote. (Read More)

The Revenue Secretary said all tobacco products have been brought under the excise net, which has led to a 22% rise in the tax mop-up target.

The Finance Minister announced the formation of a high-level committee on banking that will prepare its terms of reference and examine the entire sector, including future requirements, to help chart a roadmap for banking as India moves towards becoming a developed nation by 2047. The DFS Secretary added that the committee will study aspects such as expansion of the banking network, credit and deposits, with the government to decide on measures based on its recommendations.

On the minerals front, the FM said the proposed rare earth corridors are expected to be highly successful. Separately, the DEA Secretary said government borrowings are not on the higher side.

The Revenue Secretary said the government’s intent is to address systemic risks linked to the Securities Transaction Tax (STT). At a press conference, the Finance Minister said the increase in STT on futures and options is aimed at curbing excessive speculation.

The Finance Minister announced the Mahatma Gandhi Gram Swaraj Initiative to bring khadi, handloom and allied activities under its ambit, with targeted support for rural workers, weavers and artisans. She said Champion MSMEs will receive a three-pronged support package covering equity, liquidity and professional assistance, ensuring small businesses face no shortage of resources or funding. The FM also announced process simplification in taxation to ease compliance for enterprises. To boost exports, new opportunities have been announced for fishermen, including access to global markets through special economic zones. In the healthcare space, the FM said customs duty will be exempted on 17 identified drugs and medicines for cancer patients, a move she described as deeply meaningful and patient-centric.

A National Institute of Hospitality can create future-ready professionals who understand destination-led hospitality, regional cultures and experiential dining, hoteliers said. (Read More)

The PM E-DRIVE scheme focuses on accelerating the adoption of electric vehicles (EVs) and strengthening supporting infrastructure, including charging facilities. (Read More)

The Finance Minister said the Budget sends a clear message that India's leadership in the pharmaceutical and biopharma sectors must be preserved and strengthened. She added that the government remains focused on ensuring the country maintains its global edge in pharmacy. On critical minerals, the FM announced the creation of rare earth corridors to help India meet its own requirements. She said identifying and processing these minerals domestically will reduce dependence on external sources, including imports of rare earths and magnets.

The Finance Minister said dedicated freight corridors will pass through critical mineral-rich regions as part of efforts to strengthen logistics and support capital expenditure. She added that sustaining capex remains a priority, with measures including the development of dedicated freight corridors and 20 new national waterways. Introducing a new initiative, the FM announced the creation of city economic regions, with an allocation of Rs 5,000 crore over five years, focusing on tier-2 and tier-3 cities. She also said the government has announced seven high-speed rail corridors, which will serve as bridges connecting key economic centres.

The Finance Minister said the century is being driven by technology and the government will ensure that technological progress benefits the common man. She added that the focus is on creating a conducive environment for employment generation by building a strong ecosystem through structural reforms that improve productivity and create jobs. The Budget, she said, also places emphasis on inclusive development, with specific schemes aimed at strengthening health facilities.

“Youth without jobs. Falling manufacturing. Investors pulling out capital. Household savings plummeting. Farmers in distress. Looming global shocks - all ignored. A Budget that refuses course correction, blind to India’s real crises,” tweets Rahul Gandhi

The Union Budget has increased the allocation for the Department of Science (DoS) and Indian Space Research Organisation (ISRO) to Rs 13,705.63 crore for FY 2026–27, up from Rs 12,448.60 crore in the previous Budget Estimates. The largest share of funding continues to go towards Space Technology programmes, which have been allotted Rs 10,397.06 crore compared with Rs 9,601.98 crore last year. (Read More)

The Union Budget 2026 highlights India’s growing burden of diabetes, obesity and cancer. In her speech, Finance Minister noted that India’s disease burden is observed to be shifting towards non-communicable diseases, like diabetes, cancer and autoimmune disorders.

“The Union Budget 2026 reinforces India’s emergence as a trusted technology and innovation partner. The Government’s recognition of cutting‑edge technologies such as Artificial Intelligence as force multipliers for good governance is particularly encouraging. It underscores the pivotal role of the Indian IT industry in delivering innovation, efficiency, and scalable digital solutions for the nation.

Initiatives such as the IndiaAI Mission, National Quantum Mission, National Research Fund, and the enhanced R&D ecosystem reflect a bold, inclusive, and future‑ready vision. This alignment of policy, technology, and talent will accelerate India’s journey toward becoming a global innovation powerhouse.

Additionally, the launch of India Semiconductor Mission 2.0 will significantly strengthen the country’s technology ecosystem by deepening the integration of hardware and software capabilities, positioning India as a leader in next‑generation digital infrastructure.” - Atul Soneja, Chief Operating Officer, Tech Mahindra

Lok Sabha Leader of the Opposition Rahul Gandhi on Sunday declined to comment on the Union Budget 2026-27, stating that he would speak on Monday from Parliament's platform. Earlier in the Union Finance Minister Nirmala Sitharaman presented her ninth consecutive budget, where she created history to become first Finance Minister in India to deliver nine consecutive budgets, surpassing her own record "I will speak tomorrow, using the platform provided by Parliament," Rahul Gandhi told reporters The Congress party however described the budget as lacklustre. (Read More)

Union Budget 2026–27 prioritises tax certainty and dispute reduction, keeping tax rates unchanged while expanding safe-harbour limits (IT services up to Rs 2,000 crore), extending revised return timelines, and rationalising TDS/TCS—including a reduction to 2% for education and medical remittances. Support for manufacturing and exports through deferred duty, bonded-zone incentives, and customs rationalisation, alongside public capex of about Rs 12 lakh crore, underscores a clear focus on long-term, investment-led growth - CA Azhruddin Khan

"CREDAI welcomes the government’s continued focus on infrastructure spending, which is a big positive for the real estate sector. Investments in highways, metros, logistics corridors, railways, and urban infrastructure will improve connectivity, unlock new growth corridors, and support long-term urban development. CREDAI also appreciates the emphasis on ease of doing business. Faster approvals, simplified processes, and greater digitisation can significantly reduce project timelines and holding costs, ultimately benefiting both developers and homebuyers.

However, CREDAI is deeply disappointed that the Budget offers nothing concrete for affordable housing. With the current outdated definition of affordable housing, CREDAI estimates that the segment’s share could decline further from 18% to nearly 12% of total housing supply. This is a serious warning sign for India’s lower middle class and middle class. CREDAI believes that affordable housing is not a welfare scheme — it is economic infrastructure. It is a major driver of employment, consumption, and social stability. Rising construction costs and land prices, without corresponding policy support, are pushing developers away from this segment.

If affordable housing supply continues to weaken, the consequences are clear: higher rentals, longer commutes, and growth of informal housing. CREDAI urges the government to give urgent policy attention - Shekhar Patel, President, CREDAI National

Centre has allocated Rs 5164.8 crore for the ports, shipping, and waterways ministry, raising the FY27 outlay by 48 percent as against the Budget Estimate of Rs 3,470.6 crore of FY26. Further, to promote environmentally sustainable movement of cargo, the Budget 2026 has announced establishment of new Dedicated Freight Corridors connecting Dankuni in the East, to Surat in the West. (Read More)

“The Union Budget 2026 underscores India’s commitment to a structural reform-led economic roadmap, driven by three core ‘kartavyas’ (duties) of sustained growth, fulfilling aspirations, and advancing the vision of inclusive progress. Notably, the pharmaceutical sector was the first to be highlighted in the Finance Minister’s presentation, signalling its strategic importance. The emphasis on biologics and biosimilars is particularly timely, as India is at the cusp of taking a global lead in this space.

The Rs 10,000-crore Biopharma Shakti programme will be a key enabler for India’s journey from volume to value leadership, helping the country move from being a global supplier of quality medicines to becoming a global innovator. Alongside the expansion of the national clinical trials network and strengthening of the CDSCO with specialised scientific review and globally aligned timelines, these initiatives will enhance India’s capacity to develop complex, high-value therapies.

The addition of new NIPERs and the upgrading of existing ones will expand opportunities for advanced scientific education and skills development, building the talent pipeline essential for innovation-led growth. Recognising the rising burden of non-communicable diseases, particularly cancer, the budget also provides direct relief for patients by exempting basic customs duty on 17 cancer drugs and medicines, and extending import duty exemptions to seven additional rare diseases. Combined with regulatory simplification through central–state coordination, these measures are set to strengthen India’s biopharma ecosystem while ensuring patients in India and across the world continue to have access to affordable, high-quality medicines. We look forward to studying the detailed budget to further understand its impact on the pharmaceutical sector.” - Satish Reddy, Chairman, Dr Reddy’s Laboratories Limited

“By placing biopharma among the seven strategic frontier sectors and launching Biopharma Shakti with an outlay of Rs 10,000 crore over five years, the Union Budget makes a decisive investment in India’s health and innovation future. As India’s disease burden shifts toward cancer, diabetes and autoimmune disorders, biologics and biosimilars will be central to improving longevity and quality of life. This initiative—spanning manufacturing scale-up, global-grade regulation, new NIPER institutions and a nationwide clinical trials network—can firmly position India as a global biopharma manufacturing hub.” -Kiran Mazumdar Shaw, Chairperson , Biocon Group

"This Budget is a roadmap for the future and gives new energy to the Reform Express," Prime Minister Modi said. He added that the Budget focuses on controlling inflation.

Tax holiday until 2047 for foreign cloud providers using Indian data centers for global customers. To quality, they must provide it through an Indian reseller entity.

India Semiconductor Mission (ISM) 2.0 launched with a major incentive expansion for electronics component manufacturing scheme

Government ups semiconductor spending to Rs 8,000 crore for FY2026-27, from Rs 4,300 crore

MeitY outlay raised to Rs 21,633 crore for FY2026-27, from Rs 20,232.95 crore

Budget 2026 proposes to setup high-powered committee to recommend measures on the services sector

Govt proposes safe harbour margin of 15.5% for IT sector; expands threshold from Rs 300 crore to Rs 2000 crore

Cutting-edge technologies, including AI applications, can serve as growth multipliers.

Setting up AVGC Content Creator Labs in 15,000 secondary schools and 500 colleges.

The consolidation of software development, IT‑enabled services, KPO and contract R&D into a single ‘IT Services’ category

In a move to protect minority shareholders and curb tax arbitrage by promoters, the Finance Minister has proposed a major overhaul of the taxation framework governing share buybacks. Addressing Parliament, Finance Minister Nirmala Sitharaman said that buybacks will be taxed as capital gains for all categories of shareholders. To discourage misuse of tax arbitrage, promoters will be subject to an additional buyback tax, raising the effective tax rate to 22% for corporate promoters and 30% for non-corporate promoters.

•Customs duty exemptions on cancer drugs and rare disease treatments

•Duty on personal imports halved to 10%,  reduces landed costs of gadgets, electronics, fashion and lifestyle products.

•Tax Collected at Source reduced to 2 per cent from 20 per cent for foreign tour packages

•Duty exceptions on parts imported for Microwave Oven, potentially reducing the prices

• Simplified nil/lower TDS deduction certificates for small taxpayers (e.g., on investments/securities) to minimise upfront withholding.

•TCS cut from 5% to 2%, providing substantial relief to parents funding overseas studies or treatments

•Targeted measures for rural entrepreneurship and productivity to boost farm income, thereby spur rural consumption.

•Push to domestic manufacturing, skilling and more job creation.

•Exemption of interest on Motor Accident Claims Tribunals (MACT) compensation.

•Single Form 15G/15H filing, one-time submission to depositories to avoid excess TDS on interest and dividends.

The Union Budget 2026 has reduced the Tax Collected at Source (TCS) on outward remittances for medical and education purposes under the Liberalised Remittance Scheme (LRS) from 5 percent to 2 percent. TCS on self-funded overseas education remittances, earlier levied at 5 percent on amounts exceeding Rs 10 lakh a year, has now been reduced to 2 percent.

Overall defence expenditure up 10% in FY27 with revenue expenditure up 3.5%, but defence capital expenditure up 17% - positive for all defence stocks Madhuchanda Dey, Head of Research

Budget Estimates (BE) 2026–27

Total Expenditure:

Rs 53.47315 trillion

Total Capital Expenditure:

Rs 12.21821 trillion

Effective Capital Expenditure:

Rs 17.14523 trillion

FY27 nominal GDP estimated at 10 percent

1) STT hike on F&O to 0.5% dents sentiment and threatens to further shrink already falling trading volumes.

2) Capex raised 8% to ₹12.2 lakh crore supports infrastructure, industrials and order pipeline visibility.

3) Policy push toward semiconductors, rare earths, biosimilars and clean tech aims to reposition India as a future-growth story. Stock specific gains already visible in day’s trade

4) Fiscal deficit targets met at 44.4% for FY26, 4.3% for FY27e. Slightly higher borrowing could keep bond markets on edge

5) Buybacks now attract capital gains tax: corporate promoters at 22% and non-corporate shareholders at up to 30%, ending tax arbitrage with dividends

6) PROI equity ownership limits doubled, with individual caps raised to 10% from 5% and aggregate overseas retail holding expanded to 24% from 10%. No immediate impact on flows, but positive overall

Finance Minister Nirmala Sitharaman announced a series of measures on February 1, 2026, but kept income tax slabs unchanged for the coming financial year. While this provides continuity and stability in the tax structure, it offers no fresh relief for individual taxpayers. The basic exemption limit has also been retained at existing levels, with no increase announced in this year's Budget. Under the revised tax regime for FY 2025-26, salaried individuals below 60 years of age will not pay any tax on income up to Rs 4 lakh. Income between Rs 4 lakh and Rs 8 lakh will be taxed at 5 percent, Rs 8 lakh to Rs 12 lakh at 10 percent, Rs 12 lakh to Rs 16 lakh at 15 percent, Rs 16 lakh to Rs 20 lakh at 20 percent, Rs 20 lakh to Rs 24 lakh at 25 percent, and income above Rs 24 lakh at 30 percent. The standard deduction for salaried employees has been increased to Rs 75,000. In addition, a rebate under Section 87A will continue to be available for net taxable income up to Rs 12 lakh, effectively making such income fully tax-free.

Defence expenditure in FY27 has been pegged at Rs 5.94 lakh crore, up from Rs 5.68 lakh crore in FY26. Defence capital expenditure has increased 21% year-on-year, with the allocation for defence modernisation seeing a sharper 24% rise over last year.

Major changes to Corporate Income Tax framework, likely to impact earnings of companies in the old tax regime.

--Minimum Alternate Tax (MAT) will be a final tax, meaning it cannot be set off against future tax liability.

--However, MAT rate to come down to 14% from 15%

--Carry-forward credit till March 31 can be set off only if companies shift to new tax regime. But such a shift will entail giving up tax exemptions and deductions, implying an increase in the net tax payable

--Will affect companies still in the old tax regime and with significant carry-forward MAT credit, typically old economy companies with a capital-intensive nature of business -- Ravi Ananthanarayanan, Executive Editor - MC Pro

FY27 disinvestment set at Rs 80000 crore

PSU bank stocks have taken the news of setting up of a high level committee to review state owned banks as a positive step. Is this the sign of another wave of consolidation, going by the adverse stock reaction? -- Hamsini Karthik, Editor BFSI

FM extends Validity period of Customs Advance Rulings from 3 to 5 years

Government has announced measures to boost tourism such as development of heritage & cultural sites, announcement of Global Big cat summit which would see visit of state authorities from 95 countries, trekking & hiking experiences as well as training for tourist guides for 20 iconic locations. This would enhance tourism and is positive for hotel companies like Lemon Tree Hotels, SAMHI Hotels, Royal Orchid Hotels, Indian Hotels Company, ITC Hotels, EIH Limited as well as tourism related stocks like Safari Industries, VIP Industries, IRCTC - Bharat Gianani, Research Analyst, Moneycontrol Research

Knee jerk reaction on STT increase. No mention of defence was also unexpected although overall capex growth is positive. Fine print becomes key -Madhuchanda Dey, Head of Research

PROI equity investment limit increased from 5% to 10% under Portfolio Investment Scheme (PIS) in listed Indian equities.

The aggregate investment limit for all individual PROIs in a listed company increased from 10% to 24%.

Allowing persons resident outside India (PROI) to increase equity investments is a timely positive move, especially when FII inflows are at their weakest.

This will improve sentiments, liquidity and can increase trading activities

Key beneficiaries – BSE, NSDL, CDSL, Wealth companies like 360 ONE Wealth -- Neha Dave, Special Analyst

Export oriented sectors such as leather, seafood exports, critical minerals, bio gas blended CNG, civil and defence aviation, electronics   get a boost through duty rationalisation. Electronics gets exemption of basic custom duty for components of microwave ovens.   Shweta Punj, Editor, Policy

Budget 2026-27 focusses on rationalization of custom duties, ease of processes, decriminalization with special focus on tariff impacted sectors. Increases Cap ex to Rs 12.10 lakh cr, hikes STT on futures and borrowings - Shweta Punj, Editor, Policy

Under threat from US tariffs, FM gives duty exemptions to farmers on fish catch. Shrimps and prawns exports to US saw a steep drop after tariffs

Sensex plunged 725 points while Nifty below 25,100 with all sectors trading in red with metals, capital goods, real estate stocks falling the most.

MAT to be final tax, no further MAT credit from April 1, 2026; MAT rate reduced from 15% to 14%

Exemption of BCD on parts of microwave ovens

Reduce tariff rate on personal goods imports  from 20% to 10%: FM

FM: Exempt duty on 17 cancer drugs

FM proposes to exempt basic customs duty on components and parts required for the manufacturer of civil training and other aircraft.

Nifty capital Market Index down 7% on hike on STT on futures. Neha Dave, Special Analyst

Increase in STT will impact trading volumes at a time retail interest in markets is already waning and trading volumes is lower by 30% since peak- N Mahalakshmi, Senior Consulting Editor

The finance minister announced a proposal to offer a long-term tax holiday for foreign cloud companies that provide services to global customers through Indian resellers. The move is aimed at encouraging large-scale data-centre investments in India and strengthening the domestic cloud and digital infrastructure ecosystem. Indian companies across the value chain—including Adani Group, Tata Consultancy Services and Anant Raj—could benefit, alongside firms in power, real estate, fibre networks and cooling infrastructure. - Deborshi Chaki, National Corporate Editor, Moneycontrol

Treatment of buyback as capital gains for minority shareholders is positive for cash rich IT service companies like TCS, Infosys, HCL, Wipro - Madhuchanda Dey, Head of Research

The government’s decision to cut the TCS rate on outward remittances under the Liberalised Remittance Scheme (LRS) for medical and education purposes from 5 per cent to 2 per cent is a timely relief that eases the financial burden on students and families seeking treatment or education abroad, especially at a time of rising global costs. This proposal not only improves liquidity for genuine personal needs but also reflects a more taxpayer-friendly approach without diluting the objective of monitoring cross-border fund flows.  - Kunal Savani, Partner, Cyril Amarchand Mangaldas

BSE, Angel One shares fall up to 10% as FM Sitharaman raises STT on Futures to 0.05% from 0.02%

FM proposes provide to provide tax holiday till 2047 to any foreign company that provides cloud services to customers globally by using data center services. However, it will need to provide services to Indian customers through an Indian reseller entity.

IT services companies who want to conclude advance pricing agreement process for IT services and endeavor to conclude it within a period of two years

Increased focus on decriminalization, a six month foreign asset disclosure scheme for tax payers, opportunity to update returns. --Shweta Punj, Editor, Policy

Budget 2026 Live: Govt to borrow Rs 11.7 lakh crore in FY27 from dated securities to fund its fiscal deficit

Misreporting of income will attract a penalty equal to 100% of the tax amount - Teena Jain Kaushal, PF Editor, Moneycontrol

Gross market borrowing for FY27 is pegged at Rs 17.2 lakh crore, far higher than what market feared. Bond yields may climb on Monday and the RBI will be pushed to become a big buyer for another year - Aparna Iyer, Deputy Editor, MC Pro

Gross borrowing for FY27 proposed at Rs 17.2 trillion compared to compared to Rs 14.8 trillion in FY26. Net borrowing for FY27 pegged at Rs 11.7 trillion, a small uptick from Rs 11.2 trillion in FY26 -- Neha Dave, Special Analyst

FM introduces 6-month foreign asset disclosure scheme for tax payers

FM proposes that the deadline for filing ITR-1 and ITR-2 will continue to be July 31

TCS on medical and education reduced from 5% to 2%

The Union Budget keeps capital expenditure at the centre of the government’s economic strategy, with the outlay raised to ₹12.2 lakh crore from ₹11.21 lakh crore last year. The increase signals continuity in public investment as private capex recovery remains uneven. The budget outlines spending across transport, railways, energy and manufacturing, including proposals for high-speed rail corridors, continued support for the semiconductor mission, dedicated chemical parks and measures to secure supply chains for critical minerals. Incentives for the power sector are positioned to support rising demand from data centres and technology-led industries. Steps to recycle assets of central public sector enterprises through REITs and to strengthen the corporate bond market through a market-making framework are aimed at improving capital mobilisation and market liquidity. - Deborshi Chaki National Corporate Editor Moneycontrol

Capex growth 10.9% for FY27, positive for infrastructure sector and better than market expectations

Madhuchanda Dey, Head of Research

FM announces a comprehensive review of the Income Tax Act 1961. This was completed in the record time and the income tax Act 2025 will come into effect from April 2026. The simple income tax forms will be notified shortly -- Teena Jain Kaushal, PF Editor, Moneycontrol

TCS rate on overseas tour package reduced from 5-20% to 2%

TDS on LRS for purpose of education reduced

Finance Minister sets debt to GDP ratio for FY27 at 55.6 percent in Budget

Fiscal Deficit for FY27 slightly above market expectations

Gross market borrowing estimated at 17.2 lakh cr, higher than estimates

FM says govt has accepted recommendation of 16th Finance Commission to retain vertical share of devolution at 41%

Have provided Rs 1.4lakh cr to states for FY27 as per Finance Commission recommendations

Govt has accepted recommendation to retain 41% share for states; Rs 1.4 lakh crore for states in FY27 as SFC grants

Markets were trading in red with Sensex falling 500 points from day's high and Nifty hovering near the 25,300-mark. Barring pharma, auto all other sectors were trading in red.