🧮 Finin2min | Union Budget & Finance Bill 2026

📅 FY27 | Presented & Introduced: 1 Feb 2026 | Lok Sabha | Finin2min Summary
🎯 Objective: Implement Budget 2026-27 proposals while preserving macro stability and accelerating structural reforms

🔑 Big Picture (Executive Summary)

Theme: Stability + Scale + Structural Reform

• No tax shocks for individuals, corporates or markets
• Capex-led growth model reinforced
• Manufacturing + Services positioned as twin engines
• Compliance intensity remains high, but administrative frictions eased

➡️ Net effect: Policy continuity with selective taxpayer relief; enforcement still data-driven

1️⃣ Fiscal & Macro Framework

• Growth: ~7% real GDP trajectory reiterated
• Inflation: Moderate; monetary stability acknowledged
• Fiscal discipline: Consolidation path unchanged
• Public Capex: ₹12.2 lakh crore (↑ from ₹11.2 lakh crore)

➡️ Interpretation: Investment-led growth continues to dominate fiscal strategy

2️⃣ Income-Tax Rates — Status Quo Maintained

• No change in individual or corporate tax slabs
• Default personal taxation anchored to:
  • Section 115BAC(1A) — Income-tax Act, 1961 (AY 2026-27)
  • Section 202 — Income-tax Act, 2025 (Tax Year 2026-27)
• Banded slab structure (default):
  • Nil tax up to ₹4 lakh
  • Progressive slabs up to 30% beyond ₹24 lakh
• Surcharge structure unchanged
  • Capital-gains surcharge capped at 15%
• Health & Education Cess: 4%

➡️ Signal: Legislative continuity with clean migration to Act-2025 framework

3️⃣ Major Structural Shift — Income-tax Act, 2025

• Act, 2025 operationalised from 1 April 2026
• 1961 Act retained only for legacy matters
• Re-numbered sections, simplified drafting, digital-first processes

➡️ Impact: Long-term simplification; short-term transition load for systems & advisors

4️⃣ Tougher Compliance & Enforcement Framework

• Section 147A clarified:
  • Jurisdiction with Assessing Officer, not faceless centres
  • Certain provisions retrospective to 1 April 2021
• Time-limit clarifications & extensions:
  • Sections 153 / 153B / 144C / 275 / 286
  • Some block assessments extended to 18 months
• New interest provision — Section 234-I
• Sharper action on TDS/TCS defaults
• Reduced discretionary penalty relief

➡️ Signal: Enforcement remains strong, but process clarity improves

5️⃣ NEW — Taxpayer Relief & Compliance Eases

(Important counter-balance to enforcement narrative)

✅ Relief Measures

• MACT compensation interest:
  • Fully exempt from income tax
  • No TDS required
    Targeted relief for accident victims
• Revised / Belated ITR timeline eased:
  • Filing allowed till 31 March (earlier: 31 Dec)
  • Fees capped at:
    • ₹1,000 (income ≤ ₹5 lakh)
    • ₹5,000 (income > ₹5 lakh)
  • Non-audit business cases & trusts: deadline extended to 31 August
  • ITR-1 / ITR-2 unchanged at 31 July
• TAN relief:
  • No TAN required for resident Individuals / HUFs purchasing immovable property from non-residents
  • PAN-based TDS compliance allowed

➡️ Impact: Reduced friction for small taxpayers & genuine transactions

6️⃣ Foreign Assets Disclosure Scheme, 2026

• One-time window for small taxpayers
• Fixed tax + penalty
• Immunity from prosecution
• No reopening of completed assessments
• Payments non-refundable
• Excludes proceeds of crime & PMLA / Black Money Act cases

➡️ Positioning: Narrow compliance window, not a broad amnesty

7️⃣ Capital Gains, Buybacks & Corporate Taxes

Capital Gains

• 15% surcharge cap retained
• No adverse changes to equity LTCG / STCG or dividends

🔄 Buyback Taxation (Major Change)

• Buybacks now taxed as capital gains in shareholder hands
• No longer treated as dividend distribution
• Effective tax impact:
  • Promoters (corporate): ~22%
  • Others (individuals / non-corporate): up to 30%

➡️ Impact: Discourages promoter-heavy buybacks; nudges dividend discipline

8️⃣ MAT & Corporate Regime Rationalisation

• MAT reduced to 14% (final tax)
• No fresh MAT credits post March 2026
• Legacy MAT credit set-off restricted:
  • 1/4th usable under new domestic regime

➡️ Signal: Simplification + gradual sunset of parallel tax systems

9️⃣ TCS & STT Rationalisation

📌 TCS Rate Changes (Uniformisation Push)

➡️ Effect: Lower friction, better cash-flow predictability

📈 STT Changes (Market-side)

• Futures: 0.02% → 0.05%
• Options (premium & exercise): → 0.15%

➡️ Intent: Curb excessive F&O speculation

🔟 Manufacturing, MSMEs, Services, Infra & Finance

(Unchanged in substance — summarised for continuity)

• Manufacturing: Semiconductors, electronics, rare earths, biopharma, textiles, capital goods
• MSMEs: ₹10,000 cr Growth Fund, TReDS mandate, CGTMSE backing, Corporate Mitras
• Services: Medical tourism hubs, IT safe harbour (15.5%), cloud/data-centre tax holiday till 2047
• Infrastructure: ₹12.2 lakh cr capex, freight corridors, waterways, CERs
• Finance: Bond market making, PFC/REC restructuring, Banking HLC

🧠 Updated Finin2min Risk Matrix

• Policy shock risk: 2 / 10
• Compliance / litigation risk: 6 / 10 (↓ due to taxpayer eases)
• Market structure risk: 6 / 10 (↑ due to STT impact on derivatives)

🧮 Finin2min Verdict

Budget + Finance Bill 2026 is not loud — it is deliberate.

• 📈 Growth-positive
• 🧱 Structurally reformist
• ⚖️ Balanced enforcement with targeted relief
• 🗳️ Non-populist

Finin2min Macro Scorecard

• Growth Visibility: 8 / 10
• Fiscal Prudence: 8 / 10
• Market Friendliness: 7.5 / 10
• Compliance Stress: 6.5 / 10

This analysis summarizes Budget 2026 highlights for informational purposes only. Not tax/financial advice. Consult your advisor. Subject to final enactment.