Union Budget 2026: Navigating the New Income Tax Act and Market Shifts
Union Budget 2026 Highlights: On Sunday, February 1, 2026, Finance Minister Nirmala Sitharaman presented a forward-looking Union Budget 2026-27. While the middle class saw stability in tax slabs, the budget introduced a foundational shift with the New Income Tax Act, 2025, set to simplify the lives of millions starting April 1.
At GlobalFinMate India, we’ve broken down the complex numbers into actionable insights for your wallet and investments.
1. Union Budget 2026 Highlights: The New Income Tax Act & Slabs
The headline for 2026 is the transition to a simplified tax code. While tax rates remain unchanged from the previous year, the focus is on reducing “Tax Terrorism” through simpler forms and fewer sections.
- Rebate Limit: Under the New Tax Regime, income up to ₹12.75 Lakh (including the ₹75,000 standard deduction) remains effectively tax-free.
- ITR Deadlines: In a welcome move, taxpayers can now file Revised Returns until March 31st with a nominal fee, providing a safety net for errors.
2. Massive Relief: TCS Slashed for Travelers and Students
Perhaps the most “viral” update in Budget 2026 is the rationalization of Tax Collected at Source (TCS). The government has moved to a flat, lower rate to ease the upfront cash-flow burden on families.
| Category | Old Rate (Up to March 2026) | New Rate (From April 2026) |
| Overseas Tour Packages | 5% to 20% | 2% (Flat) |
| Education (Self-Funded) | 5% | 2% |
| Medical Treatment | 5% | 2% |
| Foreign Personal Imports | 20% | 10% |
3. Stock Market: Course Correction in F&O
For the trading community, the budget was a “dampener” as the government moved to discourage excessive speculation in the derivatives segment. The Securities Transaction Tax (STT) saw a sharp hike:
- Futures: Increased from 0.02% to 0.05%.
- Options: Increased from 0.1% to 0.15%.
- Market Impact: The Sensex saw a 2,000-point intraday crash following this announcement, reflecting the increased cost of trading.
4. Big Wins: Healthcare and Tech
- Cancer Care: Basic customs duty has been waived on 17 life-saving drugs, making treatment significantly more affordable.
- Global Data Centers: A tax holiday until 2047 was announced for foreign cloud companies using Indian data centers—a huge boost for “Digital India.”
- Biopharma SHAKTI: A ₹10,000 Crore outlay to boost domestic production of medicines.
Read More: F&O Survival Guide: How the 150% STT Hike Impacts Your Trading Strategy
Verdict: What Should You Do?
Budget 2026 is about long-term resilience over short-term “populist” giveaways. With the STT hike making F&O expensive, it is time for Indian investors to focus more on long-term equity and sector-specific opportunities like Infrastructure (₹12.2L Cr outlay) and Semiconductors.
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