Budget 2026 highlights: Key announcements on income tax, NRIs, small taxpayers and more

The Union Budget 2026-27 increases public capital expenditure (Capex) to a record ₹12.2 lakh crore, a 9% rise aimed at maintaining infrastructure momentum. Finance Minister Nirmala Sitharaman outlined three "Kartavyas" (duties): accelerating economic growth, fulfilling aspirations through skill-building, and ensuring inclusive development (Sabka Saath, Sabka Vikas).

In a major relief move, the new Income Tax Act, 2025 will come into effect from April 1, 2026, replacing the outdated 1961 law. However, no changes were made to the income tax slab for AY 2026-27. The new tax regime remains default, with slabs unchanged:'

• ₹0–4 lakh: Nil
• ₹4–8 lakh: 5%
• ₹8–12 lakh: 10%
• ₹12–16 lakh: 15%
• ₹16–20 lakh: 20%
• ₹20–24 lakh: 25%
• Above ₹24 lakh: 30%
  The old tax regime continues with deductions under 80C, HRA, home loan interest, and 80D. Taxpayers can still switch between old and new tax regime annually if they have no business income.

To ease income tax budget 2026 compliance, the ITR filing deadline has been extended from December 31 to March 31, on payment of a nominal fee. The government also proposed simplified income tax rules and forms to reduce errors and improve taxpayer experience. TCS rates were slashed:

• Overseas education and medical treatment: Reduced from 5% to 2% under LRS
• Overseas tour packages: Cut from 20% to 2%

These budget 2026 tax slab announcements aim to reduce outflow burden on middle-class families.

The Finance Bill 2026 introduces key reforms:

• TDS on NRI property sales to be deducted by resident buyer using PAN, no TAN required
• One-time foreign asset disclosure scheme for small taxpayers, students, and returning NRIs
• Interest from Motor Accident Claims Tribunal exempt from income tax

These tax budget 2026 measures enhance ease of compliance and support vulnerable groups.

A major boost for small businesses and SMEs—the government announced a ₹10,000 crore fund to create Champion MSMEs. The Self-Reliance India Fund will be topped up with ₹4,000 crore in FY27. TReDS (Trade Receivables Discounting System) will now be mandatory for all CPSEs buying from MSMEs, ensuring timely payments. These MSME budget 2026 updates aim to strengthen credit access and equity support.

To revive textile stocks and employment, the National Fibre Scheme was launched for self-sufficiency. Mega textile parks will be set up in Tier 2/3 cities, with a focus on technical textiles. The Mahatma Gandhi Gram Swaraj initiative will strengthen khadi, handloom, and handicrafts. These budget 2026 key points signal strong support for traditional sectors.

Capex (capital expenditure) has been raised to ₹12.2 lakh crore for FY27, up from ₹11.2 lakh crore. Key projects include:

• 7 high-speed corridors: Mumbai-Pune, Delhi-Varanasi, Chennai-Bangalore
• East Coast Industrial Corridor with Durgapur node
• Carbon Capture Utilization and Storage (CCUS): ₹20,000 crore over 5 years

This budget 2026 key points push aims to boost Viksit Bharat by 2047.

India remains committed to fiscal prudence, with fiscal deficit pegged at 4.3% of GDP in FY27. The 16th Finance Commission recommended 41% tax devolution to states—the highest ever. Net tax receipts projected at ₹28.7 lakh crore, with strong growth in GST and corporate tax collections.

The budget speech 2026 was broadcast live on Sansad TV, Doordarshan, YouTube, and major news portals. You can watch budget 2026 live replay or download the budget 2026 pdf from https://finmin.gov.in. The finance minister of india, Nirmala Sitharaman, delivered the speech in Parliament, outlining a vision of inclusive growth, innovation, and self-reliance.