Union Budget 2026 Speech PDF Download: FM Nirmala Sitharaman’s full budget text

As Union Finance Minister Nirmala Sitharaman unveiled her ninth Union Budget for the fiscal year 2026–27 on Sunday, the nation tuned in to catch every detail of the government’s economic roadmap.

From taxation policies to growth initiatives, the Budget lays out the vision for India’s financial year ahead. For those who wish to read the complete discourse, FM Nirmala Sitharaman’s full Union Budget 2026 speech is now available for download in PDF format.

Download the Union Budget 2026 PDF here


Read the full Union Budget 2026 here:

Hon’ble Speaker,

On the sacred occasion of Magha Purnima and the birth anniversary of Guru Ravidas, I present the Budget for the year 2026–2027.

Introduction

1. Since we assumed office 12 years ago, India’s economic trajectory has been marked by stability, fiscal discipline, sustained growth and moderate inflation. This is the result of conscious choices we have made, even in times of heightened uncertainty and disruption. Our Government, led by Hon’ble Prime Minister Modi, has decisively and consistently chosen action over ambivalence, reform over rhetoric and people over populism.

2. We have pursued far-reaching structural reforms, fiscal prudence and monetary stability whilst maintaining a strong thrust on public investment. Keeping atmanirbharta as a lodestar, we have built domestic manufacturing capacity, energy security and reduced critical import dependencies. Simultaneously, we have ensured that citizens benefit from every action of the Government, undertaking reforms to support employment generation, agricultural productivity, household purchasing power and universal services to people.

These measures have delivered a high growth rate of around 7% and helped us make substantial strides in poverty reduction and improvement in the lives of our people.

3. Today, we face an external environment in which trade and multilateralism are imperilled and access to resources and supply chains are disrupted. New technologies are transforming production systems while sharply increasing demands on water, energy and critical minerals.

4. India will continue to take confident steps towards Viksit Bharat, balancing ambition with inclusion. As a growing economy with expanding trade and capital needs, India must also remain deeply integrated with global markets, exporting more and attracting stable long-term investment.

Part A

5. As I begin Part A, I want to express my gratitude to the people for standing firmly with us as we forge our way together towards becoming one of the largest economies of the world.

6. Our aim is to transform aspiration into achievement and potential into performance, as we ensure that the dividends of growth reach every farmer, the scheduled caste, the scheduled tribes, the nomads, the youth, the poor and the women.

7. In the Viksit Bharat Young Leaders Dialogue 2026, several innovative ideas were shared with our Prime Minister, which have inspired many of the proposals, making this a unique Yuva Shakti-driven Budget.

8. Our Government’s ‘Sankalp’ is to focus on our poor, underprivileged and the disadvantaged. To deliver on this Sankalp, and given that this is the first Budget prepared in Kartavya Bhawan, we are inspired by 3 kartavya:

9. Our first kartavya is to accelerate and sustain economic growth, by enhancing productivity and competitiveness, and building resilience to volatile global dynamics.

10. Our second kartavya is to fulfil aspirations of our people and build their capacity, making them strong partners in India’s path to prosperity.

11. Our third kartavya, aligned with our vision of Sabka Sath, Sabka Vikas, is to ensure that every family, community, region and sector has access to resources, amenities and opportunities for meaningful participation.

12. This threefold approach requires a supportive ecosystem.
The first requirement is to sustain the momentum of structural reforms—continuous, adaptive, and forward-looking.
Second, a robust and resilient financial sector is central to mobilising savings, allocating capital efficiently and managing risks.
Third, cutting-edge technologies, including AI applications, can serve as force multipliers for better governance.

Reform Express

13. Our Government has undertaken comprehensive economic reforms towards creating employment, boosting productivity and accelerating growth. After the Prime Minister’s announcement on Independence Day in 2025, over 350 reforms have been rolled out. These include GST simplification, notification of Labour Codes, and rationalisation of mandatory Quality Control Orders. High-Level Committees have been formed and, in parallel, the Central Government is working with the State Governments on deregulation and reducing compliance requirements.

14. The Reform Express is well on its way and will maintain its momentum to help us fulfil our kartavya. I now move to the specific proposals.

15. Under our first kartavya to accelerate and sustain economic growth, I propose interventions in six areas:
(i) Scaling up manufacturing in 7 strategic and frontier sectors;
(ii) Rejuvenating legacy industrial sectors;
(iii) Creating “Champion MSMEs”;
(iv) Delivering a powerful push to infrastructure;
(v) Ensuring long-term energy security and stability; and
(vi) Developing City Economic Regions.

Scaling up manufacturing in 7 strategic and frontier sectors

16. Biopharma SHAKTI (Strategy for Healthcare Advancement through Knowledge, Technology and Innovation) – India’s disease burden is observed to be shifting towards non-communicable diseases, like diabetes, cancer and autoimmune disorders. Biologic medicines are key to longevity and quality of life at affordable costs. To develop India as a global Biopharma manufacturing hub, I propose the Biopharma SHAKTI with an outlay of Rs 10,000 crores over the next 5 years. This will build the ecosystem for domestic production of biologics and biosimilars.

The Strategy will include a Biopharma-focused network with 3 new National Institutes of Pharmaceutical Education and Research (NIPER) and upgrading 7 existing ones. It will also create a network of over 1,000 accredited India Clinical Trials sites. We propose to strengthen the Central Drugs Standard Control Organisation to meet global standards and approval timeframes through a dedicated scientific review cadre and specialists.

17. India Semiconductor Mission (ISM) 1.0 expanded India’s semiconductor sector capabilities. Building on this, we will launch ISM 2.0 to produce equipment and materials, design full-stack Indian IP, and fortify supply chains. We will also focus on industry-led research and training centres to develop technology and a skilled workforce.

18. The Electronics Components Manufacturing Scheme, launched in April 2025 with an outlay of Rs 22,919 crore, already has investment commitments at double the target. We propose to increase the outlay to Rs 40,000 crore to capitalise on the momentum.

19. A Scheme for Rare Earth Permanent Magnets was launched in November 2025. We now propose to support the mineral-rich States of Odisha, Kerala, Andhra Pradesh and Tamil Nadu to establish dedicated Rare Earth Corridors to promote mining, processing, research and manufacturing.

20. To enhance domestic chemical production and reduce import dependency, we will launch a Scheme to support States in establishing 3 dedicated Chemical Parks, through challenge route, on a cluster-based plug-and-play model.

21. Strong capital goods capability is a determinant of productivity and quality across different sectors. Towards building this capacity, I propose the following:

(a) Hi-Tech Tool Rooms will be established by CPSEs at 2 locations as digitally enabled automated service bureaus that locally design, test, and manufacture high-precision components at scale and at lower cost.

(b) A Scheme for Enhancement of Construction and Infrastructure Equipment (CIE) will be introduced to strengthen domestic manufacturing of high-value and technologically-advanced CIE.

(c) I also propose a Scheme for Container Manufacturing to create a globally competitive container manufacturing ecosystem, with a budgetary allocation of Rs 10,000 crore over a 5-year period.

22. For the labour-intensive Textile Sector, I propose an Integrated Programme with 5 sub-parts:
(a) National Fibre Scheme;
(b) Textile Expansion and Employment Scheme;
(c) National Handloom and Handicraft Programme;
(d) Tex-Eco Initiative;
(e) Samarth 2.0.

23. Further, I propose to set up Mega Textile Parks in challenge mode.

24. I propose to launch the Mahatma Gandhi Gram Swaraj initiative to strengthen khadi, handloom and handicrafts.

25. India has the potential to emerge as a global hub for high-quality, affordable sports goods. I propose a dedicated initiative for sports goods.

Rejuvenation of Legacy Industrial Clusters

26. I propose to introduce a Scheme to revive 200 legacy industrial clusters.

Creating “Champion SMEs” and supporting micro enterprises

27. Recognising MSMEs as a vital engine of growth, I propose a three-pronged approach.

Equity Support

28. I propose to introduce a dedicated Rs 10,000 crore SME Growth Fund.

29. I also propose to top up the Self-Reliant India Fund with Rs 2,000 crore.

Liquidity Support

With TReDS, more than Rs 7 lakh crore has been made available to MSMEs. I propose four measures including mandating TReDS for CPSE purchases and credit guarantee support.

Professional Support

31. Government will facilitate professional institutions to create ‘Corporate Mitras’.

Infrastructure

32. Our Government has undertaken several initiatives for large-scale enhancement of public infrastructure.

33. Public capex has increased from Rs 2 lakh crore in FY2014-15 to Rs 11.2 lakh crore in BE 2025-26. In FY2026-27, I propose to increase it to Rs 12.2 lakh crore.

34. I propose to set up an Infrastructure Risk Guarantee Fund.

35. I propose to accelerate recycling of CPSE real estate assets through REITs.

36. To promote sustainable cargo movement, I propose Dedicated Freight Corridors, National Waterways, and a Coastal Cargo Promotion Scheme.

37. To enhance last-mile connectivity, incentives will be provided for seaplane manufacturing and operations.

Carbon Capture Utilisation and Storage (CCUS)

38. An outlay of Rs 20,000 crore is proposed over the next 5 years.

City Economic Regions

39. An allocation of Rs 5,000 crore per City Economic Region over 5 years is proposed.

40. Seven High-Speed Rail corridors will be developed as growth connectors.

Financial Sector

41. The Indian banking sector today is characterised by strong balance sheets.

42. I propose setting up a High-Level Committee on Banking for Viksit Bharat.

43. Public Sector NBFCs will be restructured.

44. A review of FEMA (Non-debt Instruments) Rules is proposed.

45. Corporate bond market reforms will be introduced.

46. Incentives will be provided for large municipal bond issuances.

47. PROIs will be permitted enhanced equity investments.

Emerging Technologies, including AI

48. Technology adoption will benefit all sections of society.

49. Close to 25 crore individuals have come out of multidimensional poverty.

Services Sector & Employment

51. A High-Powered Education to Employment Standing Committee will be set up.

52. To create a new range of skilled career pathways for our youth, I propose interventions in the following sectors:

Health

53. Existing institutions for Allied Health Professionals (AHPs) will be upgraded and new AHP Institutions established in private and Government sectors. This will cover 10 selected disciplines, including optometry, radiology, anesthesia, OT Technology, Applied Psychology and Behavioural Health and add 100,000 AHPs over the next 5 years.

54. A strong Care Ecosystem, covering geriatric and allied care services will be built. A variety of NSQF-aligned programmes will be developed to train multiskilled caregivers combining core care and allied skills, such as, wellness, yoga and operation of medical and assistive devices. In the coming year, 1.5 lakh caregivers will be trained.

Hubs for Medical Value Tourism

55. To promote India as a hub for medical tourism services, I propose to launch a Scheme to support States in establishing five Regional Medical Hubs, in partnership with the private sector. These Hubs will serve as integrated healthcare complexes that combine medical, educational and research facilities. They will have AYUSH Centres, Medical Value Tourism Facilitation Centres and infrastructure for diagnostics, post-care and rehabilitation. These Hubs will provide diverse job opportunities for health professionals including doctors and AHPs.

AYUSH

56. Ancient Indian yoga, already respected in several parts of the world, was given mass global recognition when Hon’ble PM took it to the UN. Post-COVID, Ayurveda gained a similar global acceptance and recognition.

57. Exporting quality Ayurvedic products helps farmers who grow the herbs and the youth who process the products. To meet growing global demand, a few more steps are being taken.

58. I propose to:
(i) set up 3 new All India Institutes of Ayurveda;
(ii) upgrade AYUSH pharmacies and Drug Testing Labs for higher standards of certification ecosystem, and make available more skilled personnel;
(iii) upgrade the WHO Global Traditional Medicine Centre in Jamnagar to bolster evidence-based research, training and awareness for traditional medicine.

Animal Husbandry

59. Livestock contributes close to 16% of farm income, including of poor and marginal households. To scale up availability of veterinary professionals by more than 20,000, I propose to roll out a loan-linked capital subsidy support scheme for establishment of veterinary and paravet colleges, veterinary hospitals, diagnostic laboratories and breeding facilities in the private sector. Collaboration between Indian and foreign institutions will also be facilitated.

Orange Economy

60. India’s Animation, Visual Effects, Gaming and Comics (AVGC) sector is a growing industry, projected to require 2 million professionals by 2030. I propose to support the Indian Institute of Creative Technologies, Mumbai in setting up AVGC Content Creator Labs in 15,000 secondary schools and 500 colleges.

Design

61. The Indian design industry is expanding rapidly and yet there is a shortage of Indian designers. I propose to establish through challenge route, a new National Institute of Design to boost design education and development in the eastern region of India.

Education

62. Our Government will support States, through challenge route, in creating 5 University Townships in the vicinity of major industrial and logistic corridors. These planned academic zones will host multiple universities, colleges, research institutions, skill centres and residential complexes.

63. In Higher Education STEM institutions, prolonged hours of study and laboratory work pose some challenges for girl students. Through VGF/capital support, 1 girls’ hostel will be established in every district.

64. To promote Astrophysics and Astronomy via immersive experiences, 4 Telescope Infrastructure facilities will be set up or upgraded—the National Large Solar Telescope, the National Large Optical-infrared Telescope, the Himalayan Chandra Telescope and the COSMOS2 Planetarium.

Tourism

65. The Tourism sector has the potential to play a large role in employment generation, forex earnings and expanding the local economy.

66. I propose to set up a National Institute of Hospitality by upgrading the existing National Council for Hotel Management and Catering Technology. It will function as a bridge between academia, industry and the Government.

67. I also propose a pilot scheme for upskilling 10,000 guides in 20 iconic tourist sites through a standardized, high-quality 12-week training course in hybrid mode, in collaboration with an Indian Institute of Management.

68. A National Destination Digital Knowledge Grid will be established to digitally document all places of significance—cultural, spiritual and heritage. This initiative will create a new ecosystem of jobs for local researchers, historians, content creators and technology partners.

69. India has the potential and opportunity to offer world-class trekking and hiking experience. We will develop ecologically sustainable:
(i) Mountain trails in Himachal Pradesh, Uttarakhand and Jammu and Kashmir; Araku Valley in the Eastern Ghats and Podhigai Malai in the Western Ghats;
(ii) Turtle Trails along key nesting sites in the coastal areas of Odisha, Karnataka and Kerala; and
(iii) Bird watching trails along the Pulikat Lake in Andhra Pradesh and Tamil Nadu.

70. Under the visionary leadership of Hon’ble Prime Minister, we established the International Big Cat Alliance in 2024. This year, India is hosting the first-ever Global Big Cat Summit, where heads of governments and ministers from 95 range countries will deliberate on collective strategies for conservation.

Heritage and Culture Tourism

71. I propose to develop 15 archaeological sites including Lothal, Dholavira, Rakhigarhi, Adichanallur, Sarnath, Hastinapur, and Leh Palace into vibrant, experiential cultural destinations. Excavated landscapes will be opened to the public through curated walkways. Immersive storytelling skills and technologies will be introduced to help conservation labs, interpretation centres, and guides.

Sports

72. The Sports Sector provides multiple means of employment, skilling and job opportunities. Taking forward the systematic nurturing of sports talent set in motion through the Khelo India programme, I propose to launch a Khelo India Mission to transform the Sports sector over the next decade.

73. The Mission will facilitate:
(a) an integrated talent development pathway;
(b) systematic development of coaches and support staff;
(c) integration of sports science and technology;
(d) competitions and leagues to promote sports culture; and
(e) development of sports infrastructure for training and competition.

74. Our third kartavya aligns with our vision of Sabka Sath, Sabka Vikas towards a Viksit Bharat.

75. This requires targeted efforts for:
(a) increasing farmer incomes;
(b) empowering Divyangjan;
(c) access to mental health and trauma care;
(d) focus on Purvodaya States and the North-East Region.

Increasing Farmer Incomes

76. Fisheries: We will undertake initiatives for integrated development of 500 reservoirs and Amrit Sarovars and strengthen the fisheries value chain in coastal areas.

77. Animal Husbandry: Support will be provided through entrepreneurship development, modernisation of livestock enterprises and creation of Farmer Producer Organisations.

78. High Value Agriculture: We will support coconut, sandalwood, cocoa, cashew, agar trees, almonds, walnuts and pine nuts.

79. To enhance competitiveness in coconut production, I propose a Coconut Promotion Scheme.

80. A dedicated programme is proposed for Indian cashew and cocoa.

81. Focused cultivation and post-harvest processing of sandalwood will be promoted.

82. A programme to rejuvenate orchards and expand high-density cultivation of nuts will be supported.

Bharat-VISTAAR

83. I propose to launch Bharat-VISTAAR—a multilingual AI tool integrating AgriStack portals and ICAR systems.

SHE-Marts

84. Self-Help Entrepreneur (SHE) Marts will be set up for rural women-led enterprises.

Empowering Divyangjan

85. Divyangjan Kaushal Yojana will provide customised training.

86. Divyang Sahara Yojana will strengthen access to assistive devices.

Mental Health and Trauma Care

87. We will set up NIMHANS-2 and upgrade institutes in Ranchi and Tezpur.

88. Emergency and Trauma Care Centres will be strengthened by 50%.

Purvodaya and North-East

89. Development of East Coast Industrial Corridor, tourism destinations and e-buses is proposed.

90. A Scheme for Development of Buddhist Circuits in the North-Eastern Region will be launched.

16th Finance Commission

91. The Government has accepted the recommendation to retain vertical devolution at 41%.

Fiscal Consolidation

92. Debt-to-GDP ratio target remains 50±1 percent by 2030–31.

93. Debt-to-GDP ratio is estimated at 55.6 percent in BE 2026–27.

94. Fiscal deficit in BE 2026–27 is estimated at 4.3 percent of GDP.

Revised Estimates 2025–26

95. Non-debt receipts are Rs 34 lakh crore and total expenditure Rs 49.6 lakh crore.

Budget Estimates 2026–27

96. Non-debt receipts are estimated at Rs 36.5 lakh crore and total expenditure at Rs 53.5 lakh crore.

97. To finance the fiscal deficit, net market borrowings are estimated at Rs 11.7 lakh crore, with gross market borrowings at Rs 17.2 lakh crore.

I will now move to Part B.

PART B
Direct Taxes

Speaker Sir,

98. Now I present my proposals on Direct Taxes.

New Income Tax Act

99. In July 2024, I announced a comprehensive review of the Income Tax Act, 1961. This was completed in record time and the Income Tax Act, 2025 will come into effect from 1st April, 2026.

100. The simplified Income Tax Rules and Forms will be notified shortly, giving adequate time to taxpayers to acquaint themselves with its requirements.

101. The forms have been redesigned such that ordinary citizens can comply without difficulty.

Ease of Living

102. I propose that any interest awarded by the Motor Accident Claims Tribunal to a natural person will be exempt from Income Tax, and any TDS on this account will be done away with.

103. I propose to reduce the TCS rate on the sale of overseas tour programme packages from the current 5 percent and 20 percent to 2 percent, without any stipulation of amount.

104. I propose to reduce the TCS rate for pursuing education and for medical purposes under the Liberalised Remittance Scheme (LRS) from 5 percent to 2 percent.

105. Supply of manpower services is proposed to be specifically brought within the ambit of payment to contractors for the purpose of TDS to avoid ambiguity. Thus, TDS on these services will be at the rate of either 1 percent or 2 percent only.

106. I propose a scheme for small taxpayers wherein a rule-based automated process will enable obtaining a lower or nil deduction certificate instead of filing an application with the assessing officer.

107. For the ease of taxpayers holding securities in multiple companies, I propose to enable depositories to accept Form 15G or Form 15H from the investor and provide it directly to various relevant companies.

108. I propose to extend the time available for revising returns from 31st December to up to 31st March, with the payment of a nominal fee.

109. I also propose to stagger the timeline for filing of tax returns.

Individuals filing ITR 1 and ITR 2 will continue to file till 31st July.

Non-audit business cases or trusts are proposed to be allowed time till 31st August.

110. TDS on the sale of immovable property by a non-resident is proposed to be deducted and deposited through the resident buyer’s PAN-based challan instead of requiring TAN.

111. To address practical issues of small taxpayers like students, young professionals, tech employees, relocated NRIs, and others, I propose to introduce a one-time six-month foreign asset disclosure scheme for taxpayers to disclose income or assets below a certain size.

112. This scheme would be applicable to two categories of taxpayers:

Category A:
Taxpayers who did not disclose their overseas income or asset.

Limit: up to Rs 1 crore

Payment:

30 percent of fair market value of asset or undisclosed income as tax, and

30 percent as additional income tax in lieu of penalty

Immunity from prosecution will be granted.

Category B:
Taxpayers who disclosed overseas income and/or paid due tax but could not declare the asset acquired.

Asset value: up to Rs 5 crore

Payment: Fee of Rs 1 lakh

Immunity from both penalty and prosecution will be available.

Rationalising Penalty and Prosecution

113. Multiplicity of proceedings are a hindrance to the ease of doing business. I propose to integrate assessment and penalty proceedings by way of a common order for both.

No interest liability on penalty amount during appeal before the first appellate authority

Quantum of pre-payment reduced from 20 percent to 10 percent, calculated only on core tax demand

114. To further reduce litigation, I propose to allow taxpayers to update their returns even after reassessment proceedings have been initiated, at an additional 10 percent tax rate over and above the applicable rate. The assessing officer will use only this updated return.

115. The existing framework for immunity from penalty and prosecution in cases of underreporting will be extended to misreporting as well. In such cases, the taxpayer must pay 100 percent of the tax amount as additional income tax over and above tax and interest due.

116. Penalties for certain technical defaults — such as failure to get accounts audited, non-furnishing of transfer pricing audit report, and default in furnishing statements of financial transactions — are proposed to be converted into fees.

117. I propose to rationalise the prosecution framework under the Income Tax Act while maintaining deterrence for serious offences.

118. Non-production of books of account and documents, and the requirement of TDS payment where payment is made in kind, are being decriminalised. Minor offences will attract fine only.

119. Remaining prosecutions will be graded based on the quantum of offence.

Only simple imprisonment

Maximum imprisonment reduced to two years

Courts empowered to convert imprisonment into fine

120. There is no penalty at present for non-disclosure of non-immovable foreign assets with an aggregate value below Rs 20 lakh. I propose to provide immunity from prosecution for such cases with retrospective effect from 1.10.2024.

Cooperatives

121. Deduction is already allowed to primary cooperative societies engaged in supplying milk, oilseeds, fruits or vegetables raised or grown by members. I propose to extend this deduction to include cattle feed and cotton seed produced by members.

122. I propose to allow inter-cooperative society dividend income as a deduction under the new tax regime, to the extent it is further distributed to members.

123. I further propose to allow exemption for a period of three years to dividend income received by a notified national cooperative federation on investments made in companies up to 31.1.2026, provided the dividends are further distributed to member cooperatives.

Supporting the IT Sector as India’s Growth Engine

124. India is a global leader in software development services, IT-enabled services, knowledge process outsourcing services, and contract R&D services relating to software development. These segments are closely interconnected.

125. All these services are proposed to be clubbed under a single category of Information Technology Services, with a common safe harbour margin of 15.5 percent applicable to all.

126. The threshold for availing safe harbour for IT services is being enhanced substantially from Rs 300 crore to Rs 2,000 crore.

127. Safe harbour for IT services shall be approved through an automated, rule-driven process without any need for examination or acceptance by a tax officer. Once applied by an IT Services company, the same safe harbour can be continued for a period of five years at its choice.

128. For IT services companies seeking to conclude an Advance Pricing Agreement (APA), I propose to fast-track the Unilateral APA process and endeavour to conclude it within a period of two years. This period may be extended by a further six months at the taxpayer’s request.

129. I propose to extend the facility of modified returns, currently available to the entity entering an APA, to its associated entities as well.

Attracting Global Business and Investment

130. Recognising the need to enable critical infrastructure and boost investment in data centres, I propose to provide a tax holiday till 2047 to any foreign company that provides cloud services to customers globally by using data centre services from India. Such companies will, however, provide services to Indian customers through an Indian reseller entity.

131. I also propose to provide a safe harbour of 15 percent on cost where the company providing data centre services from India is a related entity.

132. To harness the efficiency of just-in-time logistics for electronic manufacturing, I propose to provide safe harbour to non-residents for component warehousing in bonded warehouses at a profit margin of 2 percent of invoice value. The resultant tax of about 0.7 percent will be significantly lower than in competing jurisdictions.

133. To give a fillip to toll manufacturing in India, I propose to provide income tax exemption for five years to any non-resident supplying capital goods, equipment or tooling to a toll manufacturer in a bonded zone.

134. To encourage global talent to work in India for a longer duration, I propose to exempt global (non-India sourced) income of a non-resident expert for a stay period of five years under notified schemes.

135. I propose to provide exemption from Minimum Alternate Tax (MAT) to all non-residents who pay tax on a presumptive basis.

Tax Administration

136. I propose to constitute a Joint Committee of the Ministry of Corporate Affairs and the Central Board of Direct Taxes to incorporate the requirements of Income Computation and Disclosure Standards (ICDS) into Indian Accounting Standards (IndAS). Separate accounting requirements based on ICDS will be done away with from the tax year 2027–28.

137. To support PM Modi’s vision of developing home-grown accounting and advisory firms as global leaders, I propose to rationalise the definition of “accountant” for the purposes of Safe Harbour Rules.

Other Tax Proposals

138. Changes in taxation of buybacks were introduced to address misuse of the buyback route by promoters. In the interest of minority shareholders, I propose to tax buybacks for all shareholders as capital gains.
However, to disincentivise tax arbitrage, promoters will pay an additional buyback tax:

Effective tax for corporate promoters: 22 percent

Effective tax for non-corporate promoters: 30 percent

139. TCS rates for sellers of specific goods — alcoholic liquor, scrap and minerals — will be rationalised to 2 percent, while TCS on tendu leaves will be reduced from 5 percent to 2 percent.

140. I propose to raise:

STT on futures from 0.02 percent to 0.05 percent

STT on options premium from 0.1 percent to 0.15 percent

STT on exercise of options from 0.125 percent to 0.15 percent

141. In 2019, we reformed corporate taxation by offering a simplified regime with lower rates, enabling companies to focus on business growth rather than tax planning.

142. To encourage adoption of the new regime, set-off of brought-forward MAT credit will be allowed only under the new tax regime, up to one-fourth of the tax liability.

143. MAT is proposed to be made a final tax, with no further credit accumulation from 1st April, 2026.

Final MAT rate reduced from 15 percent to 14 percent

MAT credit accumulated till 31st March, 2026 will continue to be available for set-off as above

Indirect Taxes

144. I shall now take up proposals related to Indirect Taxes. My proposals for Customs and Central Excise aim to simplify the tariff structure, support domestic manufacturing, promote export competitiveness, and correct duty inversion.

Review of Exemptions and Tariff Simplification

145. To continue rationalising customs duty exemptions, I propose to withdraw certain exemptions on items manufactured domestically or where imports are negligible. I also propose to incorporate certain effective rates directly into the tariff schedule for ease of reference.

146. I shall now present sector-specific proposals.

Promotion of Exports: Marine, Leather and Textiles

147. I propose to increase the limit for duty-free imports of inputs used in processing seafood exports from 1 percent to 3 percent of FOB value of the previous year’s export turnover.

148. I propose to extend duty-free imports of specified inputs, currently allowed for leather or synthetic footwear exports, to shoe uppers as well.

149. I propose to extend the export time limit from six months to one year for exporters of:

Leather or textile garments

Leather or synthetic footwear

Other leather products

Energy Transition and Security

150. I propose to extend the basic customs duty exemption on capital goods used for manufacturing Lithium-Ion Cells for batteries to those used for battery energy storage systems.

151. I propose to exempt basic customs duty on import of sodium antimonate used in the manufacture of solar glass.

Nuclear Power

152. I propose to extend the basic customs duty exemption on imports for nuclear power projects till 2035, and expand it to all nuclear plants irrespective of capacity.

Critical Minerals

153. I propose to exempt basic customs duty on capital goods required for processing critical minerals in India.

Biogas-Blended CNG

154. I propose to exclude the entire value of biogas while calculating Central Excise duty on biogas-blended CNG.

Civil and Defence Aviation

155. I propose to exempt basic customs duty on components and parts used in the manufacture of civilian, training and other aircraft.

156. I also propose to exempt basic customs duty on raw materials imported for manufacturing aircraft parts used in maintenance, repair and overhaul (MRO) by Defence sector units.

Electronics

157. To deepen value addition in consumer electronics, I propose to exempt basic customs duty on specified parts used in manufacturing microwave ovens.

Special Economic Zones

158. To address capacity utilisation issues faced by SEZ manufacturing units due to global trade disruptions, I propose a one-time measure allowing eligible SEZ units to sell into the Domestic Tariff Area (DTA) at concessional duty rates, subject to limits linked to export performance.

Ease of Living

159. I propose to reduce customs duty on dutiable personal imports from 20 percent to 10 percent.

160. To provide relief to patients, especially those suffering from cancer, I propose to exempt basic customs duty on 17 drugs and medicines.

161. I also propose to add seven more rare diseases for exemption of import duties on personal imports of drugs, medicines and Food for Special Medical Purposes (FSMP).

Customs Process

162. India’s role in global trade is set to expand significantly as part of the vision of Viksit Bharat. I propose multiple measures to ensure minimal intervention, faster movement of goods, and greater certainty for trade.

Trust-Based Systems

163. I propose to enhance the duty deferral period for Tier 2 and Tier 3 Authorised Economic Operators (AEOs) from 15 days to 30 days.

164. I propose to extend the same duty deferral facility to eligible manufacturer-importers. This will encourage them to obtain full Tier 3 AEO accreditation in due course.

165. To provide greater certainty and enable better business planning, I propose to extend the validity period of advance rulings, binding on Customs, from three years to five years.

166. In the spirit of a whole-of-government approach, government agencies will be encouraged to leverage AEO accreditation for preferential treatment in cargo clearance.

167. Regular importers with trusted and long-standing supply chains will be recognised in the risk management system, minimising the need for repeated verification. Export cargo using electronic sealing will be cleared directly from factory premises to the port.

168. For imports not requiring any compliance, filing of a bill of entry by a trusted importer and arrival of goods will automatically trigger Customs clearance formalities, enabling immediate release upon arrival.

169. The Customs warehousing framework will be transformed into a warehouse operator-centric system based on self-declarations, electronic tracking and risk-based audits. These reforms will replace officer-dependent approvals, reducing transaction delays and compliance costs.

Ease of Doing Business

170. Approvals required for cargo clearance from multiple government agencies will be processed through a single, interconnected digital window by the end of the financial year. Clearance processes for food, drugs, plant, animal and wildlife products — accounting for nearly 70 percent of interdicted cargo — will be operationalised on this system by April 2026.

171. For goods with no compliance requirements, Customs clearance will be completed immediately after online registration by the importer, subject to payment of applicable duty.

172. The Customs Integrated System (CIS) will be rolled out within two years as a single, integrated and scalable platform for all customs processes.

173. Use of non-intrusive scanning with advanced imaging and AI-based risk assessment will be expanded in a phased manner, with the objective of scanning every container at all major ports.

New Export Opportunities

174. To enable Indian fishermen to fully harness the economic value of marine resources beyond territorial waters, the following measures are proposed:

Fish catch by Indian fishing vessels in the Exclusive Economic Zone (EEZ) or on the High Seas will be duty-free

Landing of such fish at foreign ports will be treated as export of goods

Safeguards will be put in place to prevent misuse during fish catch, transit and transshipment.

175. To support small businesses, artisans and start-ups in accessing global markets through e-commerce, I propose the complete removal of the Rs 10 lakh per consignment cap on courier exports. Handling of rejected and returned consignments will also be improved using technology-based identification.

Ease of Living

176. I propose to revise provisions governing baggage clearance during international travel to address genuine passenger concerns. Revised rules will enhance duty-free allowances in line with present-day travel realities and provide clarity on temporary carriage of goods.

177. Honest taxpayers willing to settle disputes by paying all dues are often deterred by the negative connotation of penalties. They will now be able to close cases by paying an additional amount in lieu of penalty.

Honourable Speaker Sir, with this, I commend the Budget to this august House.

Jai Hind!