50% cut in customs duty on personal goods announced in Budget 2026: Check how much you will likely save

Finance Minister Nirmala Sitharaman in Budget 2026 has proposed to reduce the tariff rate on all dutiable goods imported for personal use from 20% to 10% to rationalize the customs duty structure for goods imported for personal goods.

As per DHL website, Basic customer duty (BCD) is charged in the imported goods and varies depending on the product type. Further, IGST is applied on the value of the goods on the BCD Harmonised System (HS) code with 8 digit classification categorises good based on the specifications' is followed in India.

How custom duties for personal goods are calculated?

As per DHL website, here is a step by step guide on calculating custom duties;

• Step 1: Determine assessable value; it is the cost insurance freight charges of the good. An individual should maintain all proper documentation to support declared value such as invoices and shipping bill.
• Step 2: Application of duty rates; BCD is applied based on HSN code.

Savings under proposed custom duty rates

Here is an example of how to calculate customs duty and taxes when importing goods in India for personal use:
Suppose you import an air conditioner with a CIF value of Rs 40,000. For an air conditioner under HSN code 84151020, here is how the custom duties will be calculated:

• Basic Customs Duty (BCD)= 40,000 * 20% = Rs 8,000
• Integrated Goods and Services Tax (IGST)= (40,000 + 8,000) * 28% = Rs 13,440
• Social Welfare Surcharge = (40,000 + 8,000 + 13,440) * 10% = Rs 6,144
• Total Duties and Taxes (BCD + IGST + Social Welfare Surcharge)= 8,000 + 13,440 + 6,144 = Rs 27,584

Therefore, the total customs duties and taxes for importing this air conditioner would be Rs 27,584.

The customs duty on personal goods have been reduced by 50% from 20% to 10%. This will lead to savings of Rs 5,632 from the example above.

• Proposed Basic Customs Duty (BCD)= 40,000 * 10% = Rs 4,000
• Integrated Goods and Services Tax (IGST)= (40,000 + 8,000) * 28% = Rs 12,320
• Social Welfare Surcharge = (40,000 + 8,000 + 13,440) * 10% = Rs 5,632
• Total Duties and Taxes (BCD + IGST + Social Welfare Surcharge)= 8,000 + 13,440 + 6,144 = Rs 21,952
• Therefore, the total customs duties and taxes for importing this air conditioner would be Rs 21,952.