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Unlocking Nation’s Potential for Greater Prosperity & Global Positioning

The Honourable Finance Minister presented Union Budget for FY 2026-27, the first budget prepared in Kartavya Bhawan, is inspired by 3 kartavyas:

i) Accelerate and sustain economic growth by enhancing productivity and competitiveness and building resilience to volatile global dynamics.

ii) Fulfil aspiration of people and build their capacity, making them strong partner in India’s path to prosperity.

iii) Aligned with 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.

This budget has underlined efforts to empower every citizen and strengthening inherent frameworks of economy to deal with various global challenges. The Budget 2026-27

is continuation of “Viksit Bharat“ goal by sustained efforts in below steps :

i) Viksit Bharat, balancing ambition with inclusion

ii) Transform aspiration into achievement

iii) Potential into performance

iv) To ensured stability and sustained growth

v) To Maintain FISCAL Discipline and Moderate Inflation

vi) To focus on poor, underprivileged and disadvantaged

vii) Enhancing productivity and competitiveness

viii) Building resilience to volatile global dynamics

ix) Build people’s capacity

x) Making them strong partners in India’s path to prosperity

xi) Ensure that every family, community, region and sector has access to resources ,amenities and opportunities for meaningful participation

Budget also aim’s at Scaling up Manufacturing in 7 Strategic and Frontier Sectors, Strengthening Capital Goods Capability, Creating Champion SME’s and supporting micro

enterprises.

The fiscal deficit in the year 2026-2027 is estimated to be 4.3 percent of GDP

With the continued endeavor od Sustaining Economic Growth, Tax Reforms to boost Manufacturing Sector, Renewing the emphasis on services sector and Financial Sector,

the Honourable Finance Minister targets Viksit Bharat.

With Best Regards, CA Sunil Sharma and Team Radisson Infrastructure 1. Infrastructure outlay increased to INR 12.2 lakh crore in the new fiscal year, compared to INR 10.96 lakh crore in the previous year, reinforcing capex-led growth. 2. Expansion of UDAN – Regional Connectivity Scheme Aim to connect 120 new destinations across the country Target to carry 4 crore passengers over the next 10 years Focus on improving connectivity to remote and underserved regions

CA Sunil Sharma and Team Radisson

Infrastructure

1. Infrastructure outlay increased to INR 12.2 lakh crore in the new fiscal year, compared to INR 10.96 lakh crore in the previous year, reinforcing capex-led growth.

2. Expansion of UDAN – Regional Connectivity Scheme

• Aim to connect 120 new destinations across the country
• Target to carry 4 crore passengers over the next 10 years
• Focus on improving connectivity to remote and underserved regions

3. Announcement of a Dedicated Freight Corridor linking Dankuni (East) to Surat (West) to enhance freight movement across key industrial and economic zones.

4. Development of 20 new National Waterways over the next five years to promote inland water transport as a cost-effective logistics alternative.

5. Introduction of seven new High-Speed Rail corridors connecting major growth clusters: • Mumbai – Pune

• Pune – Hyderabad
• Hyderabad – Bengaluru
• Hyderabad – Chennai • Chennai – Bengaluru
• Delhi – Varanasi • Varanasi – Siliguri

6. Establishment of an Infrastructure Risk Guarantee Fund to provide calibrated partial credit guarantees and attract private investment in infrastructure projects.

Marine Life & Coastal Infrastructure

1. Marine Biodiversity & Wildlife Conservation

• Emphasis on protection of marine life and coastal biodiversity, including sensitive ecosystems such as turtle nesting sites and mangroves.
• Promotion of conservation-linked initiatives to balance development with marine ecosystem preservation.

2. Eco-Tourism & Coastal Nature Trails

• Support for eco-tourism and nature-based coastal trails, including marine biodiversity and turtle conservation awareness routes.
• Encouragement of responsible tourism aligned with environmental sustainability and community participation.

3. Coastal Communities & Livelihoods

• Focus on strengthening livelihoods of coastal communities, including fisherfolk and tourism-linked service providers.
• Marine and coastal initiatives aimed at employment generation and inclusive coastal development.

4. Coastal Shipping & Cargo Movement

• Introduction of a Coastal Cargo Promotion Scheme to increase the share of inland and coastal shipping from 6% to 12% by 2047.
• Promotion of cargo movement through coastal routes to reduce logistics costs and decongest road and rail networks.

5. Sustainable Marine & Coastal Infrastructure

• Development of National Waterways and port-linked infrastructure to improve coastal and riverine connectivity.
• Emphasis on low-carbon, environmentally sustainable logistics, aligned with the long-term growth of the blue economy.

Healthcare

1. Biopharma & Innovation: Biopharma SHAKTI

• INR 10,000 crores outlay with a 5 year initiative to develop India as a global biopharma manufacturing hub
• Domestic production of biologics and biosimilars.
• Creation of a biopharma-focused education and research network with 3 new NIPERs and upgradation of 7 existing institutes.
• 1,000+ accredited clinical trial sites to accelerate drug development.
• Strengthen CDSCO with scientific review cadre for global standards & faster approvals.

2.Allied Health Professionals (AHPs) & Caregivers

• Upgrade existing AHP institutions & establish new ones in 10 disciplines (e.g., optometry, radiology, anesthesia, applied psychology, OT tech).
• Add 100,000 AHPs over next 5 years
• Build a geriatric & allied care ecosystem with NSQF-aligned programs.
• Train 1.5 lakh caregivers in wellness, yoga and operation of medical/assistive devices

3. Medical Tourism & Regional Hubs

• Launch five Regional Medical Hubs via public-private partnerships.
• Hubs to integrate medical care, education, research, AYUSH centres, diagnostics, post-care & rehabilitation.
• Generate job opportunities for doctors and AHPs.

4. AYUSH & Traditional Medicine

•  Support farmers & youth through export of Ayurvedic products Following are the Initiatives:

a. Set up 3 new All India Institutes of Ayurveda.

b. Upgrade AYUSH pharmacies & drug testing labs for higher standards.

c. Enhance WHO Global Traditional Medicine Centre, Jamnagar for evidence-based research & training.

5. Mental Health & Trauma Care

• Establish NIMHANS-2 in North India and upgrade Institutes in Ranchi and Tezpur as Regional Apex Centres for advanced care, training and research.
• Expand Emergency & Trauma Care Centres in district hospitals by 50% to protect vulnerable families.

Agriculture

1. Technology-led Support for Farmers

• Launch of Bharat VISTAAR: A multilingual AI-enabled platform to integrate government agri-data (AgriStack) and research best practices, aiming to help farmers make data-driven decisions on crop choice, weather, pest management, and markets.
• The initiative is expected to democratise access to advisory support across linguistic and regional boundaries.

2. High-Value & Diversified Agriculture

The Budget highlights support for cultivation and value addition in high-value crops, including:

• Coconut, cashew, cocoa, sandalwood and tree nuts,
• Enhanced focus on horticulture and allied sectors to increase farmer incomes and employment.

3. Allied Sectors & Rural Livelihoods

• Livestock and animal husbandry: Support via credit-linked subsidy programmes and value-chain scaling to modernise dairy, poultry, and livestock enterprises.
• Fisheries development: Integrated utilisation of water bodies to strengthen fish farming, and enhanced support mechanisms for fish producer groups.

4. Enhanced Budgetary Allocation

The agriculture sector is allocated INR 1.63 lakh crore in the Union Budget 2026–27, reflecting a continued increase support for productivity, risk mitigation, and growth in rural economies. This funding underlines the government’s commitment to:

• Strengthening food security,
• Enhancing farmer welfare,
• Expanding rural employment opportunities.

5. Cooperative & Institutional Support

Budget measures are reported to benefit:

• Agri cooperatives and dairy societies, especially through improved tax treatment and incentives aimed at boosting distribution and liquidity in rural value chains.
• Strengthening veterinary infrastructure and personnel to improve animal health services across rural India.

Tourism

1. Institutional Strengthening & Skill Development

• The National Council for Hotel Management and Catering Technology will be upgraded into a National Institute of Hospitality to strengthen institutional capacity and skilled manpower in tourism and hospitality services.
•  A structured programme will train 10,000 tourist guides through a standardised 12-week hybrid course to improve service quality and visitor experience.

2. Destination Development & Heritage Tourism

• The Budget proposes development of 15 key archaeological and heritage sites into world-class experiential tourism destinations. With ....
• These destinations will be supported by improved amenities, interpretation facilities and visitor infrastructure to attract domestic and international tourists.

3. Digital Enablement of Tourism Assets

• To enhance planning, promotion, accessibility and data-driven tourism management, a National Destination Digital Knowledge Grid will be created to digitally document and map cultural, spiritual and heritage tourism assets across the country.

4. Eco-Tourism & Trekking Initiatives

• Promotion of sustainable trekking and hiking trails under eco-tourism
• Emphasis on low-impact infrastructure and environmental conservation.
• Community participation through local guides and homestays.

Direct Taxation – Highlights

There is no change in the Tax rates.

Due date for annual returns

Due dates of return remain unchanged except for Assessee’s having income from profits and gains of business or profession whose accounts are not required to be audited under this Act or under any other law :- separate due date on 31st August.

Updated Return Allowed in case of reduction in loss claimed in original ITR

Section 139(8A) allows taxpayers to file updated returns to correct their original income returns before assessment. Earlier, updated returns were not allowed if the original return showed a loss or if reassessment proceedings (notice under Section 148) had started, and taxpayers could not reduce declared losses through updated returns. Budget 2026 relaxes these rules: updated returns can now be filed even if the original return was a loss, and taxpayers can reduce declared losses through updated returns. Also, updated returns are permitted after a Section 148 notice is issued, as long as the notice is within the prescribed time and the updated return is filed within the allowed period.

Employee Contribution to Provident fund Deduction

Current regulations mandate that employer deductions for employee contributions are contingent upon meeting the specific deadlines set by relevant fund statutes. The proposed amendment seeks to relax this requirement, permitting the deduction as long as these contributions are deposited by the income tax return filing deadline.

Extension of Revised Return Timeline

Taxpayers now have more time to fix errors. The deadline to file a revised return has been extended from 9 months to 12 months after the end of the Assessment Year. However, if you file this revision during those final three months (between month 9 and 12), a new fee will apply. Notably, the deadline for belated returns remains unchanged, staying firm at December 31st.

Direct Taxation – Highlights

Increased Securities Transaction Tax

To address excessive speculation in the derivatives market, the government has proposed a revision of STT rates effective from April 1, 2026. The changes focus specifically on Futures and Options:

• Options (Sale): Tax on the premium will increase from 0.1% to 0.15%.
• Options (Exercised): Tax on the intrinsic value will rise from 0.125% to 0.15%.
• Futures (Sale): Tax on the traded price will jump significantly from 0.02% to 0.05%

Exemption on interest income under the Motor Vehicles Act, 1988:

The proposed amendment to the Income Tax Act, 2025 (replacing the 1961 Act) provides a complete exemption for interest income received under the Motor Vehicles Act, 1988. This exemption applies to individuals or their legal heirs in cases involving death, permanent disability, or bodily injury. Consequentially, such payments are excluded from the TDS (Tax Deducted at Source) framework under Section 194A, regardless of the interest amount.

Change in TDS/TCS Rates

Direct Taxation – Highlights

Increase in Maximum amount of Penalty u/s 254

Failure to furnish information when called for by the income-tax authorities during the course of an information-gathering exercise currently attracts a penalty of ₹1,000. In terms of the proposed amendment, this ceiling is sought to be substantially increased, empowering the authorities to levy a penalty of up to ₹25,000 in cases where the proprietor, employee, or any other person present at the business premises does not provide the information as required.

Key provisions for TDS

The proposed amendments introduce multiple measures to simplify and streamline the TDS regime, including:

(i) Enabling specified persons to apply for lower or nil TDS certificates through an electronic process handled by a prescribed authority (effective from 1 April 2026),

(ii) Dispensing with the requirement to obtain a TAN for resident individuals and HUFs purchasing immovable property from NRIs, with PAN being sufficient for TDS compliance in such cases (effective from 1 October 2026),

(iii) Allowing investors to submit declarations for non-deduction of TDS (Forms 15G/15H) at the depository level, which will be shared with the income payer (effective from 1 April 2027), and

(iv) Clarifying that payments for supply of manpower shall be treated as “work” for TDS purposes and subjected to applicable TDS rates of 1% or 2%, thereby removing ambiguity regarding classification under professional, technical, or contractual services.

Imposition of penalty for under-reporting or misreporting of income within Assessment Order:

Under the existing provisions, penalties for under-reporting or misreporting of income are initiated through separate proceedings after completion of assessment, and interest under section 220(2) is levied after thirty days from the notice of demand even when an appeal is pending. The proposed amendment provides that such penalty shall be imposed as part of the assessment order itself, thereby eliminating separate penalty proceedings and reducing litigation, and further defers the levy of interest under section 220(2) until the passing of the order by the Commissioner (Appeals) or the Income-tax Appellate Tribunal, as applicable, in cases arising from DRP-based assessments.

Direct Taxation – Highlights

Exempt Income

1. Data centre services exemption

• Foreign companies will be exempt from tax on income arising in India from procuring data centre services from a specified Indian data centre.
• Exemption available up to tax year ending 31 March 2047.
• If services are provided to Indian users, they must be routed through an Indian reseller.
• Specified data centre must be MeitY-notified and owned and operated by an Indian company.

2. Deduction for critical minerals prospecting

• Schedule XII to be expanded to include critical minerals.
• Prospecting and exploration expenditure on such minerals will be eligible for deduction under section 51, allowed over 10 years from commercial production.

3. Exemption for supply of capital equipment to electronics manufacturers

• Tax exemption for foreign companies on income from supplying capital goods/equipment/tooling to Indian contract manufacturers in customs bonded areas producing electronic goods on their behalf.
•  Exemption valid up to AY 2030–31.

4. Exemption of Capital Gains from sale of Sovereign Gold Bonds

• Under the existing provisions, capital gains tax is not levied on income arising from the sale of Sovereign Gold Bonds, even if they are sold before maturity.
• It is now proposed that this exemption will apply only if the bonds are subscribed at the time of original issue and held until redemption on maturity.

Taxation on Buy Back of shares

Under the new provisions effective from 1 April 2026, consideration received on share buy-back will be taxed as capital gains instead of dividend income. For promoters, the effective tax rate will be 30%, and for promoter companies, it will be 22%, applicable from FY 2026-27 onwards.

Direct Taxation – Highlights

Conversion of Penalties into Fees

Prosecution under Black Money Act, 2015

Under the existing provisions of sections 49 and 50 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, prosecution is initiated where a resident wilfully fails to furnish a return of income or wilfully omits to disclose foreign income or foreign assets in the return of income, and such offence is punishable with rigorous imprisonment for a term not less than six months and which may extend up to seven years, along with fine; however, under the proposed amendment, these sections are sought to be amended to provide that no prosecution shall be initiated in respect of foreign assets other than immovable property where the aggregate value of such assets does not exceed ₹20 lakh, thereby granting relief in cases of minor and inadvertent non-disclosures.

Direct Taxation – Highlights

Extension of IFSC / OBU tax benefits

Under section 147, IFSC units currently enjoy a 100% deduction for 10 out of 15 years, and OBUs for 10 years. To boost IFSC competitiveness, this is proposed to be extended to 20 out of 25 years for IFSC units and 20 years for OBUs, with post-deduction income of IFSC units taxed at a concessional 15%, effective from 1 April 2026 (AY 2026–27).

Time limit for issuance of order by the transfer pricing officer

The time limit for issuance of order by the transfer pricing officer substituted to ‘before one month prior to the month in which the limitation period expires’ as against ‘sixty days before the expiry of limitation period’ and accordingly the following applies under the Income-tax Act, 2025 (‘the 2025 Act’):

Under the Income-tax Act, 1961 (‘the 1961 Act’) and from 1 June 2007, the computation of 60 days is revised and applies as  under:

Direct Taxation – Highlights

Advance Pricing Agreements

•  For Advance Pricing Agreements (‘APAs’) signed on or after 1 April 2026 and for years beginning from that date, the eligibility to file a return, or a modified income tax return pursuant to an APA, extended to Associated Enterprises (‘AEs’) of the taxpayers signing the APA. This would enable the AEs to claim refund of any additional taxes paid by it or withheld from its income. The AEs to furnish such return within a period of three months from the end of the month in which the APA is signed.
• Unilateral APAs for companies engaged in Information Technology services announced to be fast tracked with an endeavour to conclude within a period of two years, extendable by a further six months at the taxpayer’s request.

Direct Taxation – Highlights

Streamlining of Proceedings under IT Act, 1961

Direct Taxation – Highlights

Streamlining of Proceedings under IT Act, 2025

Direct Taxation – Highlights

Streamlining of Proceedings under IT Act, 2025

Indirect Tax/GST – Highlights

• For reducing post-supply discounts, supplier needs to issue a credit note U/s 34 from the value of supply
• The benefit of 90% provisional refund has now been extended to include accumulated ITC arising due to inverted duty structure
• The place of supply for intermediary services has been shifted from location of supplier to location of recipient
• Central Government may notify any existing authority including a Tribunal, to hear appeals until the NationalAppellate Authority for AdvanceRuling is formed
• It is clarified that minimum threshold limit of Rs. 1000 for claiming refund is not applicable for export of goods or services made with payment of tax

Customs – Highlights

• Customs Act, 1962 will now extend its jurisdiction to fishing and allied activities by Indian – flagged vessels beyond India’s territorial waters
• Further, fish harvested by Indian-flagged vessels beyond territorial waters may be imported into India duty-free, and if landed at a foreign port, may be treated as exports subject to prescribed conditions
• Validity period of advance ruling has been extended from 3 years to 5 years, without altering the condition related to change in law or facts
• Prior permission of the proper officer for inter-warehouse transfer has been removed, simplifying the procedure
• Extensive amendments have been carried out in Customs Tariff to incorporate various exemptions, concessions and rate changes
• It is proposed that under Section 28(6)(i), where duty along with interest and penalty at 15% is fully paid, the proceedings shall be deemed conclusive as to the matters stated therein, and the penalty so paid shall also be treated as a charge for non-payment of duty.