Union Budget 2026-27: Key Highlights at a Glance

Every Union Budget comes with expectations—but Budget 2026–27 arrives with a clear message: India is gearing up for the future while taking care of today’s needs. From boosting manufacturing and infrastructure to easing the burden on taxpayers and strengthening healthcare, this budget focuses on steady growth, job creation, and long-term economic stability.

1. New Income Tax Slab 2026-27 ​

The Section 87A rebate also remains the same as last year. So, under the new regime, residents with a net taxable income of up to ₹12 lakh still claim a rebate of up to ₹60,000, effectively making their tax liability zero.

2. TCS Relief

TCS on foreign education, medical treatment and overseas tour packages has been reduced to 2% from 5%. A six-month window has also been introduced for voluntary disclosure of undisclosed foreign assets or income, mainly targeting students, professionals and returning NRIs, without interest during the appeal period.

Finance Minister Nirmala Sitharaman proposed an extension of the deadline for filing ITR-3 and ITR-4 from 31 July to 31 August.

The investment limit for NRIs was increased from 5% to 10%, and the overall investment limit was increased to 24% from 10%. The move is expected to enable greater participation of NRI capital and improve access to long-term overseas funds.

3. Buyback Provisions

Initially, all the sale proceeds from the sale of shares on buyback is treated as dividend income. As per the new budget, sale of shares on buyback is taxed under capital gains. For promoters, an additional buyback tax is levied. This will make the effective tax outgo for buyback transactions at 22% for corporate promoters and 30% for non-corporate promoters.  

4. Connectivity Projects

The Budget places strong emphasis on improving connectivity, with plans to develop seven high-speed rail corridors across key routes, make 20 national waterways operational over the next five years, and establish a dedicated freight rail corridor connecting Dankuni to Surat to strengthen logistics and transportation efficiency.

5. Defence Allocation

The Defence Allocation in Budget 2026 underscores the government’s continued focus on strengthening national security and defence preparedness. For FY27, an allocation of ₹5.94 lakh crore has been earmarked for the defence sector, reflecting a steady increase in spending to modernise armed forces, enhance operational capabilities, and support indigenous defence manufacturing.

6. Manufacturing, MSMEs, and Make in India Push

​The Budget places a strong focus on promotion of semiconductors, biotechnology, and healthcare, allocating ₹40,000 crore to India Semiconductor Mission 2.0 and ₹10,000 crore to the Biopharma Shakti initiative.

7. Technology-led growth is a defining pillar of the Union Budget 2026

AI, digital infrastructure, and data-based services were the key drivers of India’s growth plans. The launch of Bharat-VISTAAR, a multilingual AI tool for agriculture, highlights the government’s intent to integrate technology with grassroots development.

8. Healthcare and Social Infrastructure

Healthcare receives a focused push in the new budget, with plans to establish NIMHANS 2.0, upgrade national mental health institutes, and expand emergency and trauma care facilities at district hospitals. In a major relief for patients, the government has also waived basic customs duty on 17 cancer medicines and extended duty-free imports to more rare disease treatments, improving access to affordable care.  It also proposes the growth and expansion of Ayurveda and traditional medicine institutions, supporting long-term industrial growth and a stronger healthcare ecosystem.

Railways received a capital allocation of ₹2.77 lakh crore, the highest ever, with focus on new lines, rolling stock, freight corridors and passenger capacity expansion. Continued emphasis on national highways, waterways and high-speed rail corridors strengthens logistics efficiency.

9. Education, Skills and Workforce Development

Budget 2026 focuses on making education more practical and job-oriented. The government plans to connect better what students learn with the skills companies actually need. Steps like setting up an Education-to-Employment committee, creating AVGC content-creator labs in 15,000 schools, and developing university townships near industrial areas will help students gain real-world exposure.

Conclusion

​As India moves forward on its journey toward becoming a global economic powerhouse, Budget 2026 is a steady, strategic step in the right direction.