Finance Minister Nirmala Sitharaman will present her ninth consecutive Budget on February 1 in the Lok Sabha. The Budget Session of Parliament will commence on January 28 and continue till April 2, with one break.
Finance Minister Nirmala Sitharaman is set to present her ninth consecutive Union Budget in the Lok Sabha on February 1, amid expectations of an overhaul of the Customs duty regime, much on the lines of GST structure rationalisation, and more reform measures to boost the economy in the wake of heightened geo-political uncertainty.
The Budget is likely to propose an overhaul of the Customs duty regime, on the lines of GST rate rationalisation, aimed at simplifying taxation and improving trade competitiveness. It is also expected to outline a clearer roadmap for fiscal consolidation, with the government’s focus gradually shifting from deficit management to reducing the debt-to-GDP ratio.
Here are the top expectations from the Budget 2026-27
- With the new and simplified Income Tax Act, 2025, coming into effect from April 1, the industry expects the Budget to outline transition provisions, rules and FAQ for better understanding.
- Some incentives, like hike in standard deduction, to further encourage individuals to shift to new income tax regime which offers low tax rates but no exemptions, from the old regime with plethora of exemptions and deductions.
- Rationalisation of TDS categories into fewer rates, slabs.
- Overhaul of customs regime may include fewer rates, amnesty scheme to unlock Rs 1.53 lakh crore stuck in disputes, and procedural simplification to boost ease of doing business.
- Focus on reducing debt-to-GDP ratio from the 2026-27 fiscal year.
- Higher allocation for defence expenditure in view of rising geopolitical tensions.
- Outlay for Viksit Bharat — Guarantee for Rozgar and Ajeevika Mission (Gramin) (VB-G RAM G) scheme under which cost will be shared between the Centre and states in 60:40 ratio.
- Provision for 8th Pay Commission which will be expected to be implemented from January 1, 2026.
- Devolution of taxes to the states in line with the recommendations of the 16th Finance Commission.
- Incentive for MSMEs, and tariff sensitive sectors, like gems and jewellery, ready made garments and leather.
- Funding for exploration and processing of critical minerals such as lithium, cobalt and rare earth magnets.
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