Archive · 26 Jan 2026
Budget 2026: Customs Overhaul, TDS Rationalisation
The Union Budget 2026, to be presented by Finance Minister Nirmala Sitharaman on February 1, is expected to focus on several key areas.
These include an overhaul of the customs duty regime, similar to the GST structure, and measures to boost the economy amid geopolitical uncertainties.
The budget aims to target a reduction in the debt-to-GDP ratio starting from the 2026-27 fiscal year.
For individuals, there are hopes for an increase in the standard deduction, following last year's hike in the income tax exemption limit to ₹12 lakh.
The budget will also outline transition provisions for the new Income Tax Act, 2025, which comes into effect on April 1.
Other expectations include higher defence spending, funding for critical minerals, and incentives for MSMEs and tariff-sensitive sectors.
The budget aims to balance fiscal prudence with economic growth.
Finance Minister Nirmala Sitharaman will present the Union Budget 2026 on February 1, focusing on customs duty overhaul and economic reforms.
The budget aims to target a reduction in the debt-to-GDP ratio starting from the 2026-27 fiscal year.
Individuals hope for an increase in the standard deduction following last year's income tax exemption limit hike to ₹12 lakh.
The budget will outline transition provisions for the new Income Tax Act, 2025, effective from April 1.
Key expectations include higher defence spending, funding for critical minerals, and incentives for MSMEs and tariff-sensitive sectors.
- Who
- Indian Government, Finance Minister Nirmala Sitharaman, Investors, Market Participants
- What
- Union Budget 2026
- When
- February 1, 2026
- Where
- Parliament of India
- Why
- To outline fiscal policies, capital expenditure plans, economic reforms, and support for various sectors
Government and Pro-Growth Stakeholders
Fiscal Conservatives
Capital Expenditure Prioritization
Government and Pro-Growth Stakeholders
Support for continued high capital expenditure to drive economic growth and infrastructure development.
Fiscal Conservatives
Concern over high spending levels and potential fiscal strain.
Tax Policy
Government and Pro-Growth Stakeholders
Advocates for targeted tax incentives to support specific sectors like MSMEs and exports.
Fiscal Conservatives
Prefer broader tax reforms that simplify the system and reduce overall tax burden.
- Fiscal Deficit Expectation
- 4.2–4.4% of GDP
- Capital Expenditure 2025-26
- ₹11.21 lakh crore (3.1% of GDP)
- Key Sectors for Spending
- Infrastructure, Defence, Railways, Agriculture, Rural Development, Technology, AI
- Tax Rationalization
- Modest, with focus on sectoral incentives
- Support for Exports
- Possible subsidies or incentives for tariff-hit sectors
- Budget Presentation Date
- February 1, 2026
- FDI in Insurance
- Raised to 100%
- Fiscal Deficit FY26
- 4.4%
- Income Tax Exemption Limit
- ₹12 lakh
- Debt-to-GDP Ratio Target
- Focus on reducing from 2026-27
- Defence Expenditure
- Higher allocation due to geopolitical tensions
- VB-G RAM G Scheme
- Cost shared between Centre and states in 60:40 ratio
- 8th Pay Commission
- Expected implementation from January 1, 2026
- Devolution of Taxes
- In line with 16th Finance Commission recommendations
- Incentives for MSMEs
- Support for tariff-sensitive sectors like gems, jewellery, garments, and leather
- Critical Minerals Funding
- Exploration and processing of lithium, cobalt, and rare earth magnets
Sources
Stock Market Outlook: Budget 2026, Fed Meet And Other Key Triggers For Dalal Street Next Week
Palladian Partners Advisory Ltd expects Budget 2026 to Centre on Affordability, Tax Alignment and Project Funding
Union Budget: PM Modi govt on road to reform towards ‘Viksit Bharat’ goal
Budget likely to see continuity in government's capex push: HSBC report
Modi Government's Budgets: Journey Of Development, Welfare And Reforms
Union Budget 2026: Capex growth expected to stay central on the agenda, says expert
Union Budget likely to focus on Capex push, gradual fiscal consolidation: ICICI Bank Research
Market returns may be 2-3% above nominal GDP growth in 2026: Anthony Heredia
Budget 2026: Customs Overhaul, TDS Rationalisation Among Key Expectations
Union Budget 2026-27: Customs overhaul, TDS rationalisation among key expectations
Agri-biz sector calls for farmers’ empowerment, climate-resilient growth in Budget
Budget 2026 LIVE: EY, JM Financial outline growth drivers amid tariff and market concerns
The Indian thali needs to move India beyond rice and wheat. Budget 2026 can fix it
Budget 2026: What is a mini budget & why is it presented?
Union Budget 2026: New Tax Regime got wider slabs, higher rebate benefits from April 1; check details
Budget 2026: Three macro worries for the Finance Minister
