New Delhi: Today is 1st February. The day that decides the direction of the country’s economy. Today, Finance Minister Nirmala Sitharaman will present the 9th Union Budget in the Parliament. While taxpayers are expecting relief from this budget, the eyes of middle class and village farmers are also fixed on the government. Investors are dependent on how the government strikes a balance between growth and fiscal balance. This budget is coming at a time when on one hand the country’s domestic demand is said to be strong and on the other hand there is an atmosphere of turmoil in the world. The global economy is going through a period of uncertainty amid US tariff policies and geopolitical tensions.
The Economic Survey 2025-26 presented in Parliament just before the budget has given a big picture of India’s economy. The working-age population is benefiting, but there is a big challenge of health and employment. Growth is expected to be 6.8% to 7.2% in the coming financial year. Domestic demand has strengthened. At present, every section wants to know whether there will be a change in the tax slabs in Budget 2026? Will the emphasis again be on employment and infrastructure? Or will it increase rural spending?
Fiscal deficit kept at 4.3 percent
Union Finance Minister Nirmala Sitharaman has set a target of keeping the fiscal deficit at 4.3 percent for the financial year 2026-27. He said that the new Income Tax Act will come into effect from April 1, 2026 and its forms will be released soon so that taxpayers can easily become familiar with the new rules. A new scheme will be introduced for small taxpayers, in which lower or nil deduction certificate can be easily obtained through a rule-based automated process. Supply of human resource services will now come under the ambit of TDS and TCS rate for education and medical purposes under LRS will be reduced to 2 percent.
Budget 2026: Relief to corporate world, MAT rate reduced to 14%
Finance Minister Nirmala Sitharaman has announced major changes in Minimum Alternate Tax (MAT) for companies. Now the MAT rate has been reduced from 15% to 14%. The most important change is that from April 1, 2026, MAT will be considered as ‘final tax’. This means that no MAT credit will be available in future and the old credit-offset system will end. This step of the government has been taken to simplify the tax process and reduce disputes.
Government will help in setting up five centers for medical tourism
The Finance Minister said, a person of Indian origin will be allowed to invest in shares of listed companies of India under the ‘Portfolio Investment Scheme’. An additional amount of Rs 4,000 crore will be added to the Self-reliant India Fund and a provision of Rs 10,000 crore has been made for biopharma ‘Shakti’ for the next five years.
A high-level standing committee will be constituted in the field of education, employment and entrepreneurship, which will recommend measures focused on the service sector as the main driver of a developed India. The capital expenditure target for the financial year 2026-27 will be increased to Rs 12.2 lakh crore.
The government will help the states in setting up five centers for medical tourism and under this, a proposal has been made in the budget to set up five medical tourism centres. A proposal to develop 15 archaeological sites including Lothal and Hastinapur has also been included in the budget. Total government expenditure is estimated to be Rs 53.5 lakh crore in 2026-27.
A scheme for development of Buddhist circuit will be launched to preserve temples and monasteries in the north-eastern region. The fiscal deficit is estimated to be 4.3 percent in 2026-27, which was 4.4 percent in the current financial year.
Three new AIIMS of Ayurveda
Nirmala Sitharaman said that the government has accepted the recommendations of the 16th Finance Commission and the 41 percent tax transfer formula has been retained. Three new All India Institutes of Ayurveda will be established. An incentive of Rs 100 crore has been proposed for issuing municipal bonds.
Khelo India Mission will be started to bring change in the sports sector. A fund of Rs 10,000 crore has been proposed in the budget for SMEs. In view of the boom in Animation, Visual Effects, Gaming and Comics (AVGC) sector, Indian Institute of Creative Technologies will be supported to set up AVGC ‘Content Creator Lab’ in 15,000 secondary schools and 500 colleges.
‘About 2.5 crore people came out of poverty’
In Budget 2026, Union Finance Minister Nirmala Sitharaman said that about 2.5 crore people have come out of multidimensional poverty. He said that the fiscal deficit is estimated to be 4.3 percent in 2026-27, whereas in the current financial year it is 4.4 percent. The government has proposed the debt-GDP ratio to be 55.6 percent in 2026-27, which is 56.1 percent in the current financial year.
The Finance Minister has announced Rs 20,000 crore for the Carbon Sequestration and Utilization Scheme in the Budget and proposed a loan-linked capital subsidy support scheme for veterinary colleges, hospitals and diagnostic labs. He announced a provision to make cloud services tax free till 2047.
Union Finance Minister Nirmala Sitharaman, while presenting Budget 2026 in Parliament today, announced several important changes in the Income Tax structure. While the government has taken strict steps to stop tax evasion, it has also given huge relief to small taxpayers and those traveling abroad.
1. Heavy penalty for giving wrong information- The Finance Minister gave a clear message that violation of tax rules will now be costly. He announced that if a taxpayer misreports his income, he will be fined 100% of the tax amount. This step has been taken to make tax compliance more transparent and strict.
2. Traveling abroad became cheaper: Huge reduction in TCS rate – To promote the tourism sector and provide relief to the middle class, the government has reduced the TCS (Tax Collected at Source) on foreign tour packages to 2%. Earlier this rate was between 5% to 20%. Now traveling abroad will become quite affordable for the general public.
3. Extra time given to revise ITR- A big relief for taxpayers is that now they will be able to revise their Income Tax Return (ITR) till March 31. However, a small fee will have to be paid for this.
The Finance Minister clarified that:
- The original deadline for filing ITR-1 and ITR-2 will remain the same as July 31.
- Taxpayers will now have more time to correct errors.
4. ‘Disclosure Scheme’ for those having assets abroad- The government has launched a six-month ‘Foreign Asset Disclosure Scheme’ for small taxpayers. Under this, people who have properties abroad can give their details to the government within a limited time frame. Its objective is to save small taxpayers from legal hassles and to give them an opportunity to declare their assets.
5. Other important changes-
- TDS on sale of property: Now tax deduction at source (TDS) will also be made on sale of immovable properties by non-residents.
- Simplification of rules: The Finance Minister said that income tax rules are being further simplified, the notification of which will be issued soon.
Big announcements for tax relief, tourism and agriculture
Union Finance Minister Nirmala Sitharaman made a big announcement in the budget saying that the TCS rate on the sale of foreign travel program packages will now be 2%, which was earlier 5% and 20%. There will be no condition of any amount for this. He also said that now income tax will not be levied on the interest received by a person from Motor Accident Claim Tribunal and TDS will also not be deducted on it. The government also announced new initiatives in the tourism and environment sectors. Sitharaman said that ecologically sustainable mountain trails will be developed in Himachal Pradesh, Uttarakhand and Jammu and Kashmir, and such trails will also be developed in Araku Valley and Western Ghats. Turtle trails will be developed near major turtle nesting areas in Odisha, Karnataka and Kerala to conserve biodiversity and promote tourism. A major change in the agriculture sector has come under ‘India Expansion’. It is a multilingual AI tool that will give smart and easy access to farmers and agribusinesses by connecting the Agri-Stack portal and ICAR’s agricultural practices package to the AI system.
She-Mart announcement
Nirmala Sitharaman said, SHE (Self-help Entrepreneur) marks will be set up as community-owned retail shops to help women entrepreneurs.
Big proposals in education, sports, agriculture and health
Union Finance Minister Nirmala Sitharaman said, I propose several steps for setting up new institutions, university townships, girl hostels and telescope infrastructure facilities under investment in the higher education sector. A girls’ hostel will be built in every district of the country. Union Finance Minister Nirmala Sitharaman further said, the sports sector provides employment, skill development and job opportunities. It is proposed to launch a Khelo India Mission to transform the sports sector over the next decade by taking forward the systematic nurturing of sports talent initiated through the Khelo India programme.
To enhance competitiveness in coconut production, I have proposed a Coconut Promotion Scheme to increase production and enhance productivity through various interventions, including replacement of non-productive trees with new varieties or plantations in major coconut-producing states. A dedicated program for Indian cashew and cocoa has been proposed to enable India to become self-reliant in raw cashew and coconut production and processing, enhance export competitiveness and transform Indian cashew and cocoa into premium global brands by 2030.
Union Finance Minister Nirmala Sitharaman said, India’s animation, visual effects, gaming and comics (AVGC) sector is a growing industry, which will require 20 lakh professionals by 2030. Proposes to support Indian Institute of Creative Technologies, Mumbai, to set up AVGC Content Creator Labs in 15,000 secondary schools and 500 colleges
Union Finance Minister Nirmala Sitharaman said… There is a proposal to establish three new All India Ayurveda Institutes. It is proposed to upgrade AYUSH pharmacies and drug testing laboratories to provide more skilled people and upgrade WHO’s Global Center for Traditional Medicine at Jamnagar.
Farmers will get AI tools and girl hostels… many big announcements together in the budget
Bharat Vistaar AI Agri tool was announced for farmers in the budget. Apart from this, a girl hostel will be built in every district. While presenting the Union Budget 2026-27, Finance Minister Nirmala Sitharaman proposed to establish three new All India Ayurveda Institutes. To promote India as a medical tourism hub, a plan will be introduced to establish 5 regional medical tourism hubs in the country with the help of states. To make the services sector the main engine of developed India, it is proposed to set up a high-powered standing committee on ‘Education to Employment and Enterprise’, with the aim of ensuring India’s 10 percent global share in services by 2047. This committee will give priority to growth, employment and export prospects and will assess the impact of emerging technologies including AI on employment and skills and give recommendations. To promote investment, Citizens of India Resident Abroad (PROI) will be allowed to invest in equity instruments of listed Indian companies under the Portfolio Investment Scheme and their investment limit is proposed to be increased from 5 per cent to 10 per cent. With the aim of aligning the banking sector with the new development journey for a developed India, it has been announced to constitute a high-level committee on banking, which will conduct a comprehensive review keeping in mind financial stability, inclusion and consumer protection. To promote environment-friendly passenger transport, 7 high-speed rail corridors – Mumbai-Pune, Pune-Hyderabad, Hyderabad-Bengaluru, Hyderabad-Chennai, Chennai-Bengaluru, Delhi-Varanasi and Varanasi-Siliguri – will be developed. Along with this, it has been proposed to increase public capital expenditure to Rs 12.2 lakh crore in 2026-27.
