Explore the comprehensive updates from the Union Budget 2026, including tax reforms, fiscal policies, and sector-specific announcements for the upcoming financial year.
Key Tax Reforms
Sector-Specific Announcements
Infrastructure and Development
Digital and Technological Initiatives
FAQs on Union Budget 2026
The Union Budget 2026 introduced several key tax reforms aimed at simplifying compliance and enhancing revenue collection.
Income Tax Changes
Significant changes have been made to the income tax structure to benefit taxpayers.
Introduction of a new Income Tax Act, 2025 effective from April 1, 2026.
Standard deduction increased to ₹60,000 under the new regime.
Rebate under Section 87A increased to ₹25,000 for income up to ₹7 lakh.
Worked Example: A taxpayer earning ₹6.5 lakh will pay zero tax after rebate under the new regime.
Corporate Tax Reforms
Corporate tax reforms aim to boost economic growth and simplify compliance.
MAT rate reduced to 15% from 18.5%.
Buyback tax reduced to 15% from 20%.
Incentives for startups extended until March 2027.
Introduction of a simplified tax regime for MSMEs.
Customs Duty Adjustments
Adjustments in customs duties to promote domestic manufacturing and exports.
Customs duty exemption on capital goods for lithium-ion cell manufacturing.
Duty-free import of fish catch by Indian vessels.
Simplification of customs tariff structure to address duty inversion.
Exemption on raw materials for defence aircraft MRO.
TDS and TCS Revisions
Revisions in TDS and TCS provisions to improve cash flow and compliance.
Simplified TDS on NRI property sales.
TCS on overseas education and medical treatment reduced to 2%.
Removal of TAN requirement for resident buyers.
Automated Bill of Entry processes for goods without compliance requirements.
The budget outlines targeted support for various sectors to drive growth and development.
Manufacturing and MSMEs
Focused initiatives to support manufacturing and MSMEs.
Equity funding and credit facilitation measures.
Sector-specific schemes for manufacturing growth.
Increased public capital expenditure to ₹12.2 lakh crore.
Support for MSME digital transformation.
Agriculture and Rural Development
Initiatives to boost agricultural productivity and rural development.
AI-led initiatives in agriculture.
Increased funding for rural infrastructure projects.
Support for organic and sustainable farming.
Expansion of rural skilling programs.
Tourism and Culture
Enhancements in tourism infrastructure and cultural preservation.
Development of new tourism circuits.
Investment in cultural heritage sites.
Skill development programs for tourism sector.
Promotion of eco-tourism initiatives.
Education and Skill Development
Emphasis on education and skill development for future readiness.
Introduction of digital learning platforms.
Expansion of vocational training centers.
Scholarships for higher education in technology fields.
Collaboration with global educational institutions.
The budget places a strong emphasis on infrastructure development to support economic growth.
Transport and Logistics
Initiatives to enhance transport and logistics infrastructure.
New transport and logistics initiatives announced.
Investment in high-speed rail projects.
Development of multimodal logistics parks.
Expansion of national highway network.
Urban Development
Focus on urban development and smart city projects.
Funding for smart city initiatives.
Development of affordable housing projects.
Investment in urban public transport systems.
Enhancements in urban sanitation and waste management.
Energy and Environment
Commitment to sustainable energy and environmental conservation.
Extension of customs duty exemption for nuclear power projects.
Investment in renewable energy projects.
Support for biogas and CNG initiatives.
Promotion of energy-efficient technologies.
Digital Infrastructure
Strengthening digital infrastructure to support technological advancements.
Expansion of broadband connectivity in rural areas.
Investment in data centers and cloud infrastructure.
Promotion of digital payment systems.
Support for AI and machine learning research.
The budget introduces several digital and technological initiatives to drive innovation and efficiency.
AI and Machine Learning
Promotion of AI and machine learning across sectors.
AI-led initiatives in agriculture and governance.
Funding for AI research and development.
Collaboration with global tech companies.
Support for AI startups and innovation hubs.
Digital Governance
Enhancements in digital governance to improve service delivery.
Introduction of e-governance platforms.
Automation of government services.
Expansion of digital ID systems.
Promotion of blockchain technology in governance.
Cybersecurity
Strengthening cybersecurity measures to protect digital infrastructure.
Investment in cybersecurity infrastructure.
Development of national cybersecurity policy.
Training programs for cybersecurity professionals.
Collaboration with international cybersecurity agencies.
Digital Education
Initiatives to enhance digital education and literacy.
Expansion of digital learning platforms.
Introduction of coding and programming courses.
Support for digital literacy programs.
Collaboration with ed-tech companies.
What is the new standard deduction under the Income Tax Act, 2025?
The new standard deduction under the Income Tax Act, 2025 is ₹60,000, applicable from April 1, 2026, under the new tax regime.
How has the rebate under Section 87A changed?
The rebate under Section 87A has been increased to ₹25,000 for individuals with income up to ₹7 lakh, applicable from FY 2025-26.
What are the changes in MAT and buyback tax rates?
The MAT rate has been reduced to 15% from 18.5%, and the buyback tax has been reduced to 15% from 20%, effective from FY 2025-26.
Are there any changes in customs duty for lithium-ion cell manufacturing?
Yes, customs duty exemption on capital goods used for manufacturing lithium-ion cells has been extended, promoting domestic production.
What is the new TCS rate for overseas education and medical treatment?
The TCS rate for overseas education and medical treatment has been reduced to 2%, improving cash flow for families with international expenses.
What initiatives have been announced for MSMEs?
The budget includes equity funding, credit facilitation measures, and a simplified tax regime for MSMEs to support their growth and digital transformation.
How does the budget support digital education?
The budget supports digital education through the expansion of digital learning platforms, introduction of coding courses, and collaboration with ed-tech companies.
What are the key infrastructure development initiatives?
Key initiatives include investment in transport and logistics, urban development, renewable energy projects, and digital infrastructure expansion.
How is the budget promoting AI and machine learning?
The budget promotes AI and machine learning through funding for research, collaboration with tech companies, and support for AI startups and innovation hubs.
What cybersecurity measures are included in the budget?
The budget includes investment in cybersecurity infrastructure, development of a national cybersecurity policy, and training programs for cybersecurity professionals.