The Union Budget 2026–27, presented by Finance Minister Nirmala Sitharaman, signals a calibrated push toward growth acceleration, consumer relief, and compliance-driven discipline. With India’s GDP growth projected at 6.8–7.2% in FY27, the Budget seeks to raise middle-class spending power while preserving fiscal stability.
The strategy is two-pronged:
- Cost relief through tax rationalisation and customs duty cuts for consumers, exporters, and strategic sectors
- Targeted cost increases to discourage tax evasion and excessive market speculation
- Here is a complete, sector-wise breakdown of what becomes cheaper and what gets costlier.
WHAT GETS CHEAPER IN UNION BUDGET 2026–27
1. Overseas Travel & Tourism
Tax Collected at Source (TCS) Rationalisation
- Earlier: 5–20% TCS on overseas tour packages
- Now: Flat 2% TCS on all overseas tour packages
Impact
- 60–90% reduction in tax burden
- Lower upfront travel costs
- Boost to tourism and travel operators
Example:
₹1 lakh tour package → TCS drops to ₹2,000 (from ₹5,000–₹20,000)
2. Foreign Education & Medical Treatment Abroad
LRS TDS Reduction
- Earlier: 5% TDS
- Now: 2% TDS on education and medical remittances
Impact
- Overseas education and healthcare become more affordable
- Supports student mobility and critical medical access
Example:
₹25 lakh education remittance → TDS reduced to ₹12,500
3. Personal Imports (Customs Duty Cut)
- Earlier: 20% Basic Customs Duty
- Now: 10% BCD on all personal-use imports
Impact
- Cheaper international parcels and gifts
- Boost to cross-border e-commerce
4. Cancer Drugs (Full Duty Exemption)
17 life-saving cancer medicines fully exempted from customs duty
Impact
- Treatment costs fall by 10–30%
- Improved access to advanced oncology drugs
5. Rare Disease Medicines
- Customs duty exemption expanded to 7 additional rare diseases
- Covers medicines, FSMP, and diagnostic nutrition
Impact
- 20–50% cost reduction
- Major relief for families dealing with rare diseases
6. Seafood Export Inputs
- Duty-free import limit raised from 1% to 3% of FOB value
Impact
- Lower processing costs
- Strong push to seafood exports and coastal employment
7. Leather & Footwear Exports
- Duty-free imports extended to shoe uppers
- Export time window extended from 6 months to 1 year
Impact
- 10–15% cost reduction
- Boost to leather clusters (Tamil Nadu, Karnataka, Punjab)
8. Scrap, Minerals & Tendu Leaves
- Unified 2% customs duty on scrap, minerals, alcoholic liquor
- Tendu leaves duty cut from 5% → 2%
Impact
- Simplified tariff regime
- Support to tribal livelihoods and mineral-based industries
9. Renewable Energy Equipment
- Duty exemption extended to Battery Energy Storage Systems (BESS)
- Solar glass input (sodium antimonate) exempted
Impact
- 15–25% reduction in renewable equipment costs
- Faster clean energy transition
10. Nuclear Power Projects
- Full duty exemption on nuclear capital goods extended till 2035
- Applies to all plant capacities
Impact
- Long-term certainty for nuclear expansion
- Lower project costs and energy security boost
11. Critical Minerals Processing
- Capital goods for critical mineral processing fully exempted
Impact
- Promotes domestic value addition
- Reduces import dependence for rare earths and battery minerals
12. Civil Aircraft Manufacturing
- Aircraft components fully exempted from customs duty
Impact
- 10–15% reduction in manufacturing costs
- Strengthens aviation manufacturing ecosystem
13. Defence Aircraft MRO
- Raw materials for defence aircraft MRO exempted
Impact
- Improved defence readiness
- Lower maintenance costs
14. Consumer Electronics (Microwave Ovens)
- Specified components exempted from duty
Impact
- Encourages domestic electronics manufacturing
- Potential price relief for consumers
15. Fisheries: EEZ & High Seas Catch
- Fish caught beyond territorial waters exempted from duty
- Treated as exports if landed abroad
Impact
- Fishermen incomes up by 15–25%
- Higher foreign exchange earnings
16. E-Commerce Exports
- ₹10 lakh value cap on courier exports removed
Impact
- Massive boost for MSMEs, artisans, and start-ups
- Expected 100%+ growth in e-commerce exports
WHAT GETS COSTLIER IN UNION BUDGET 2026–27
1. Income Tax Misreporting
- Penalty increased to 100% of tax amount
- Applicable in cases of deliberate misreporting
Impact
- Strong deterrence against tax evasion
- Encourages voluntary disclosure
2. Undisclosed Movable Assets
- Penalties introduced for non-disclosure of movable assets
(jewellery, vehicles, art, financial assets)
Impact
- Greater asset transparency
- Improved tax compliance
3. Securities Transaction Tax (STT) on Derivatives
Futures
- STT increased from 0.02% → 0.05%
Options
- Premium & exercise STT unified at 0.15%
Impact
- Higher trading costs
- Speculative activity discouraged
- Market stability improved
Conclusion
The Union Budget 2026–27 strikes a careful balance:
- Cheaper essentials, healthcare, clean energy, exports, and manufacturing
- Costlier speculation and non-compliance
For consumers, exporters, MSMEs, and strategic industries, the Budget offers significant relief and long-term growth incentives, while reinforcing discipline in taxation and financial markets.
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