Budget 2026-27
Analysis of the Annual Financial Statement, Ministry Allocations, and Strategic Pillars of Viksit Bharat.
Total Expenditure
FY 2026-27 BE
Fiscal Deficit
~4.3% of GDP
Capital Exp.
Capex Push
Revenue Receipts
Net Tax + Non-Tax
- Total Union Budget 2026-27 is ₹53,47,315 Cr — with capital expenditure at 22.8% of total spending, the highest ever.
- Fiscal deficit is targeted at 4.3% of GDP (₹16,95,768 Cr), continuing a path of fiscal consolidation from 5.1% in FY25.
- Income tax relief for the middle class: zero tax up to ₹12 lakh under the new regime, with rationalized slabs and increased standard deduction benefiting salaried taxpayers.
Where Money Comes & Goes
Revenue Sources
Net Tax Revenue (Centre)
Direct + indirect taxes (net)
₹28,66,922 Cr
53.6%
Non-Tax Revenue
Dividends, profits, fees
₹6,66,228 Cr
12.5%
Non-debt Capital Receipts
Recoveries + other receipts
₹1,18,397 Cr
2.2%
Borrowings & Other Liabilities
Fiscal deficit financing
₹16,95,768 Cr
31.7%
Expenditure Priorities
States' Share of Taxes (Devolution)
Share of central taxes
₹15,26,255 Cr
28.5%
Interest Payments
Debt servicing
₹14,03,972 Cr
26.3%
Capital Expenditure
Infrastructure & assets
₹12,21,821 Cr
22.8%
Other Spending
Remaining expenditure
₹11,95,267 Cr
22.4%
Other spending is derived from remaining total expenditure after major heads.
Transfers to States & UTs
Total Transfer to States/UTs
Transfers + grants + schemes
₹26,20,769 Cr
States' Share of Taxes
Devolution of central taxes
₹15,26,255 Cr
Budget Balance
Fiscal deficit is estimated at 4.3% of GDP.
₹16,95,768 Cr
Borrowings fund the gap between receipts and expenditure.
Ministry-wise Allocations
| Ministry / Sector | Description | Allocation (BE 26-27) | Share of Total |
|---|---|---|---|
Interest Payments | Service of National Debt | ₹14.40 L Cr | 26.9% |
Defence | Modernization & Border Infra | ₹5.55 L Cr | 10.4% |
Food Subsidy | Food Security (Consumer Affairs) | ₹3.02 L Cr | 5.6% |
Road Transport | National Highways & Roads | ₹2.82 L Cr | 5.3% |
Railways | New Tracks & Rolling Stock | ₹2.78 L Cr | 5.2% |
Fertilizer Subsidy | Farmer Support | ₹1.77 L Cr | 3.3% |
Home Affairs | Police & Internal Security | ₹1.53 L Cr | 2.9% |
Agriculture | Farmer Welfare Schemes | ₹1.13 L Cr | 2.1% |
Rural Development | Incl. MGNREGA | ₹92,322 Cr | 1.7% |
Communications | Telecom Infrastructure | ₹89,335 Cr | 1.7% |
Education | School & Higher Ed | ₹71,148 Cr | 1.3% |
Health | Public Health | ₹54,331 Cr | 1.0% |
Science & Technology | R&D Support | ₹41,670 Cr | 0.8% |
Labour | Employment Schemes | ₹33,215 Cr | 0.6% |
Atomic Energy | Nuclear Power | ₹13,563 Cr | 0.3% |
External Affairs | Diplomacy & Aid | ₹13,467 Cr | 0.3% |
Space | ISRO Missions | ₹6,375 Cr | 0.1% |
New Tax Regime
AY 2026-27| Income Slab | Rate |
|---|---|
| Up to ₹4,00,000 | Nil |
| ₹4,00,001 - ₹8,00,000 | 5% |
| ₹8,00,001 - ₹12,00,000 | 10% |
| ₹12,00,001 - ₹16,00,000 | 15% |
| ₹16,00,001 - ₹20,00,000 | 20% |
| ₹20,00,001 - ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
Tax Reforms
New Simplified Income Tax Act, 2025 to replace the 1961 Act and simplify compliance.
Biopharma SHAKTI
₹10,000 Cr mission to position India as a global biopharma hub, focusing on biologics and biosimilars.
Semiconductor 2.0
Launch of India Semiconductor Mission (ISM) 2.0 to advance technological sovereignty and supply chains.
Infrastructure
Container Manufacturing Scheme (₹10k Cr) and Rare Earth Corridors in Odisha, Kerala, AP & TN.
Strategic Analysis
Strategic Pillars: The Three Kartavyas
Yuva Shakti / Viksit Bharat — three stated duties.
- •Sustain Economic Growth: Enhancing productivity and resilience against global dynamics.
- •Fulfill Aspirations: Building capacity of youth to be partners in prosperity.
- •Sabka Saath, Sabka Vikas: ensuring Last Mile delivery to every region and community.
Key Tax Reforms & Ease of Doing Business
A major overhaul of the direct tax code with the introduction of the Income Tax Act, 2025.
- •New Income Tax Act, 2025: Simplified code effective April 1, 2026.
- •Rationalization: TCS on overseas tour/education reduced to 2%. Uniform customs duty on personal imports and gifts.
- •Decriminalization: Non-production of books and failure to pay TDS (kind) decriminalized.
- •Exemptions: Full customs duty exemption on 17 cancer drugs and drugs for 7 rare diseases.
Industrial & Manufacturing Push
Targeted missions to reduce import dependence and boost high-tech manufacturing.
- •Biopharma SHAKTI: ₹10,000 Cr outlay for biologics and R&D (NIPERs reinforced).
- •Electronics: Component Manufacturing Scheme outlay raised to ₹40,000 Cr.
- •Rare Earths: Dedicated corridors for mining and processing in mineral-rich states.
- •Chemical Parks: 3 new parks under plug-and-play model.
Green Transition & Future Tech
Balancing growth with sustainability through strategic investments.
- •Semiconductors: ISM 2.0 to focus on equipment, materials, and skilled workforce.
- •Textiles: Integrated Textile Programme with 'Tex-Eco' initiative and Mega Parks.
- •Capital Goods: Construction & Infrastructure Equipment (CIE) Scheme to strengthen domestic logistics.
Key Schemes & Missions
Biopharma SHAKTI
NewMission to build India as a global biopharma manufacturing hub, including NIPER upgrades and clinical trial networks.
₹10,000 Cr (5 years)
India Semiconductor Mission 2.0
NewExpands into equipment, materials, IP design, and skill development to deepen the domestic value chain.
Electronics Components Manufacturing Scheme
Scale-upOutlay raised to deepen electronics manufacturing and supply chains.
₹40,000 Cr
Rare Earth Corridors
NewDedicated corridors in Odisha, Kerala, Andhra Pradesh, and Tamil Nadu to boost mining and processing.
Container Manufacturing Scheme
NewBuilds a globally competitive container manufacturing ecosystem.
₹10,000 Cr (5 years)
Integrated Textile Programme
NewFive-part initiative to modernize textiles, boost skilling, and promote sustainable manufacturing.
Tax & Compliance Measures
Procedural and structural changes — return-filing rules, TDS thresholds, dispute settlement, and search-and-seizure provisions. For headline rate moves, see Tax Changes below.
Income Tax Act, 2025
Simplified code replacing the 1961 Act with clearer compliance pathways.
Effective: From April 1, 2026
TCS on Overseas Education/Tour
Reduced to a uniform 2% to ease compliance for students and families.
Customs Duty Exemptions
Full exemption on select cancer and rare disease drugs to improve affordability.
Decriminalization
Removal of criminal penalties for select procedural defaults to improve ease of doing business.
Tax Changes
Headline rate and duty changes from the Finance Bill — grouped by direction. Not exhaustive; see the AFS PDF for the full schedule.
Reduced / Exempted
TCS on overseas tour packages cut to 2%
TCS reduced from 5%/20% to a uniform 2%.
TCS on LRS education/medical remittances cut to 2%
Lower TCS for education and medical remittances under LRS.
TCS on tendu leaves reduced to 2%
Lower TCS rate for tendu leaves under the tax reforms list.
Customs duty exemptions for select healthcare items
Exemptions for 17 cancer drugs and drugs/foods for 7 rare diseases.
Customs duty exemptions for manufacturing inputs
Exemptions on parts/components for microwave ovens, aircraft manufacturing, and lithium-ion cell capital goods.
Rationalization
Uniform customs duty for personal imports
Uniform customs duty for personal imports and gifts to simplify compliance.
No headline rate increases highlighted in official summaries.
Budget Speech
Finance Minister Nirmala Sitharaman, Lok Sabha, 1 February 2026 — official text via the buttons above.
Official Links
This is not an official Government of India page. Data is compiled from publicly available budget documents.