India’s Union Budget 2026-27, presented by Finance Minister Nirmala Sitharaman on February 1, 2026, focused on driving long-term growth while balancing taxpayer relief, infrastructure expansion, social welfare and economic reforms. Below are the top 11 key highlights from this year’s budget — and what they mean for citizens, industries and the economy as a whole.
1. No Change in Income Tax Slabs
Despite expectations for tax relief, the government kept the income tax slabs unchanged for the coming financial year, providing continuity and stability for individual taxpayers under both the old and new tax regimes. Existing rates will continue to apply for FY 2026-27 starting April 1.
2. New Income Tax Act Implementation
The budget outlined that the Income-tax Act, 2025 will come into effect from April 1, 2026. This new legislation aims to simplify tax compliance, modernise rules, and provide clearer processes for taxpayers while maintaining current rates.
3. Relief on Foreign Travel and Overseas Spending
Significant incentives were announced for travellers: TCS (Tax Collected at Source) on foreign travel and educational/medical payments abroad has been reduced to 2%, down from earlier higher rates — making international trips and healthcare visits more affordable for Indians.
4. Custom Duty Reductions on Select Goods
To promote affordability and manufacturing efficiency, custom duties on personal imports were cut — for example, custom duty on goods for personal use reduced from 20% to 10%, and some components, like certain microwave parts, now face zero duty.
5. Extended ITR Filing Deadlines
The budget proposed extending the deadline for filing revised income tax returns from December 31 to March 31, giving taxpayers more flexibility to correct filings without penalties.
6. Boost to Capital Expenditure
Massive capital spending was a clear priority, with capital expenditure increased to ₹12.2 trillion, nearly 9% higher than the previous year. This allocation is designed to accelerate infrastructure projects — from railways and highways to airports and ports.
7. High-Speed Rail Corridor Expansion
In a transformative step for transport infrastructure, the budget sanctioned seven high-speed rail corridors across India. These corridors will enhance regional connectivity, boost economic activity and reduce travel times between major cities.
8. Tourism & Eco-Trails Support
The government announced initiatives to develop eco-friendly tourism infrastructure in destinations like the Himalayas, Western Ghats and forested regions, using trail development to encourage sustainable travel and community income opportunities.
9. Education and Student Support
The budget focused on strengthening education by proposing university townships, expanded hostel facilities for girls in every district, and enhanced research infrastructure, improving access and safety for students nationwide.
10. Bio-Pharma and Technology Incentives
To build a globally competitive biotech sector, a ₹10,000 crore “Bio-Pharma Shakti” programme was introduced. Additionally, the India Semiconductor Mission 2.0 and allocations for electronics manufacturing and research centres aim to boost high-tech domestic production.
11. Sector Reforms and MSME Growth Fund
The budget announced structural reforms across sectors. This includes banking reform panels, new investor incentives, and an MSME Growth Fund to empower small businesses — enhancing credit access and operational flexibility.
What This Budget Signals
The 2026 budget emphasised economic stability, growth and sustainability without drastic tax hikes or cuts. It maintained continuity for taxpayers, while strongly pushing infrastructure, technology, student welfare and industry support. It also reflects a strategic balance between stimulating investment and keeping financial discipline tight as India continues on its path toward rapid, inclusive growth.
Conclusion
This year’s budget blends tax predictability with targeted reforms, aiming to create an environment conducive to investment, job creation, and domestic capability building. By protecting individuals from abrupt tax changes and aggressively backing infrastructure and key sectors, the government has charted a course toward long-term economic resilience and competitiveness.
