Budget 2026 Highlights: PDF Download, Key Takeaways, Important Points

Budget 2026 is expected to be focused on consumption, infrastructure, economic stability and sustainability amid dynamic geo-political landscape and growing climate change awareness. While the income tax and indirect taxes are expected to rationalized in such a manner to encourage consumption, emphasis on defence, railways and emerging sectors like AI and robotic technologies is both expected and crucial at the current economic situation.

The Union Budget 2026 will be presented on 01st February 2026 (Sunday), at 11.00AM.

Key Expectations - Budget 2026

Income Tax Slabs

As considerable income tax slab relaxations has been made in the budget 2025 under the new regime, another round of generous tax concessions don’t seem very likely in the upcoming budget. However, small tweaks, and simpler compliance process under the new regime is expected, since the government is pushing towards greater consumption, which requires more disposable income.

Abolishment of the Old Tax Regime 

Since the new tax regime is gaining more attractions among a wide group of individual taxpayers, the old tax regime is losing its relevance. The relaxed slab rates, minimal to nil documentation requirements and higher rebate in the recent years have made the new tax regime more beneficial to a significant section of the taxpayers. 

However, the old tax regime is expected to continue for the next few years, since there is still a material segment of taxpayers for whom the old regime proves to be more beneficial, owing to a variety of tax saving deductions available under the same.

Addressing grey areas in the Act

Over the past few years, the government has steadily worked towards simplifying the tax laws and make it more compliance-friendly. However, interpretational ambiguities still exist in key transactions like mergers and acquisitions, vesting of ESOP to employees in specific scenarios, and so on. 

The aforesaid gaps in the law is long overdue to be addressed, tax professionals and HNIs are equally expecting them to be addressed in the budget 2026.

Administrative Reforms

Through the government has been very keen in enhancing the ITR processing speed, digitalisation of the assessment proceedings, simpler ITR forms and faster refunds, the pace at which litigations are disposed is still slow. 

This leads to more compliance cost to the government, and more hassle to the assessees. Reforms at this front will ensure fater revenue collections, while reducing the unwanted lengthy proceedings to the taxpayers.

Real Estate Sector

Increasing the threshold limit of affordable housing will encourage ownership and boost residential real estate demand. It has the ability to address the sluggish semi-urban and rural real estate market.

As India aims housing for all by 2029, policies and reforms in this sector is expected to aid the achievement of this goal.

Manufacture and MSME Development

The development of small and medium industries had always been a crucial matter of concern in the job-dependent Indian economy. Various policy reforms benefiting the MSMEs on the following terms are expected in the approaching Union Budget. Key expectations include

• Credit support and access to finance
• Enhance resilience to address global uncertainty
• Last mile support, ensuring the products reach the semi-urban and rural areas.

Medical Field

Inflation in the medical sector has been higher than the overall inflation of the economy. This greatly affects the section of people suffer from chronic diseases. More often than not, this section is mostly senior citizens, whose income is not as high as the working class of the society. 

Therefore, addressing the rising cost and bottlenecks in the access to health care remains a key factor of concern, likely to be addressed in the Union Budget 2026.

Defence Sector

As tensions escalate throughout  various parts of the world, the geo-political landscape looks more turbulent than ever. As a nation which has seen hostility and tensions at the border in the recent past, India is expected to focus on a stronger defence system in the upcoming budget. Key expectations include:

• Encouraging indigenous defence manufacture, thorough capital infusion, financial  and tax concessions.
• Targeted policy reforms on defence research, especially related to artificial intelligence and robotics.

Budget Highlights - 2025

PDF Download

Download the Budget Speech - 2025 

Introduction of a New Tax Bill

A new Income Tax Bill aims to replace the existing Income Tax Act of 1961. While the bill is designed to simplify tax compliance and reduce the complexity of current tax laws, it also keeps the tax laws updated and relevant to the contemporary economic environment.

Changes in Tax Structure Under the New Regime

The following table shows the updated tax slab under the new regime, as per the budget 2025.

Increase in Rebate u/s 87A

Individuals whose income (taxed under normal rates) is up to Rs 12 lakhs remains tax-free, owing to an increase in the rebate limit from Rs. 25,000 to Rs. 60,000.

Rationalisation of TDS/TCS 

The Union Budget 2025 has slashed the threshold limits for various TDS sections, presented in the below table:

Agriculture

• National Mission of High Yielding Seeds launched to promote climate friendly and pest resistant seed varieties.
• Phase I rollout of Dhan Dhanya Krishi Yojana, covering 100 districts. This helps in skilling technology and invigorating the agricultural sector, thereby promoting rural economy.
• Makhana Board was established in Bihar to support the production, processing and marketing of Makhana.

MSMEs

• The classification of MSME has seen a significant change, as mentioned in the below table

Exports

• Set up of an Export Promotion Mission, providing financial benefits like ease the access to the cross border factoring support and export credit.
• Introducing a platform called BharatTradeNet, easing documentation and financing in international trade.
• Modernization of warehousing infrastructure, thereby providing targeted enhanced warehousing facilities to air cargo - specifically high value perishable products.

Don't miss the highlights from previous years' Budgets!
Budget 2025 Highlights
Budget 2024 Highlights 
Budget 2023 Highlights 
Budget 2022 Highlights 

Related Articles:
1. Budget 2026 – Date, Time, When and Where to Watch Live?
2. Budget 2026 Expectations
3. Budget 2026 Expectations on Income Tax