Budget expectations Highlights: Income Tax, incentives, policy support among demands from Finance Minister Sitharaman

This blog is now closed. You can check Livemint's latest Budget 2026 coverage here!

Sheeshram Yadav, Managing Director, Yugen InfraThe real estate industry urged the government to consider lowering the GST on luxury housing from the current 10-12%.

“Such a move will not only enhance the buyer's mood but also attract essential investments. The proper policy support can help the Indian real estate landscape to grow faster, become more sustainable and develop smart cities that are ready for the future,” he said.

Mr. Amith Agarwal, Co-founder & CEO, StarAgri has urged the government to take note of India's agriculture needs, which includes advancement in digitisation and deeper technolohy push to enhance the sector's productivity.

“Indian agriculture needs deeper digitisation, stronger technology adoption, and greater farmer participation online. A renewed push to the Digital Agriculture Mission especially by supporting agritech companies with projects in AI-based crop monitoring, GPS-driven farm mapping, and intelligent interventions such as drone-enabled farming can accelerate this shift meaningfully,” he said.

The sector has also urged the government to establish a policy or committee to develop an alternative rural credit framework that reflects the realities of farmers' incomes and financial behaviour. "Agri- and rural-focused NBFCs that specialise in farmer credit should receive differentiated ratings and enhanced lending limits, as a uniform approach for rural and urban NBFCs does not serve India’s agricultural economy,” he added.

As the Union Budget 2026 is approaching, the alcobev sector is expecting the government to introduce measures that would bring greater policy predictability and rationalisation across taxation and regulatory frameworks.

One of the key expectations that the industry is seeking is simplification of customs duties on imported raw materials and brewing inputs, along with clearer import–export guidelines to support premiumisation and global competitiveness.

“Streamlined procedures and reduced compliance complexity would significantly improve ease of doing business, encourage responsible consumption, and enable Indian spirits brands to scale more efficiently,” said Prasann Kedia, Managing Director at Associated Alcohols & Breweries Ltd.

A stable and consistent policy environment will be critical in unlocking long-term investments, strengthening domestic manufacturing, and supporting sustainable growth, he added.

Muneer Ahmad, the Managing Director of ViewSonic India believes that as India accelerates its journey towards a technology-driven future, the upcoming budget is a key opportunity to strengthen digital learning and embrace emerging technologies. Here are the expectations:

— Policies that support affordable devices, high-speed connectivity, and smart classroom solutions, as they will be vital to bridging the urban-rural learning divide.

— More investment in technologies such as AI and cloud-based platforms can enhance educational quality while preparing students with the skills needed for the global knowledge economy.

— Incentives for technology adoption in schools and skill development centres can accelerate this transformation, creating a digitally empowered workforce.

Somnath P. Patil, Pro-Chancellor, Dnyaan Prasad Global University (DPGU) said that the critical components of the 2026 Budget will be an increase in Government expenditures for education, specifically moving toward the long-imagined target of 6% of GDP.

“ Higher allocation must be accompanied by targeted funding for research, innovation, and faculty development, especially through mechanisms like the National Research Foundation," he said.

He further added that another key area of focus in this Budget should be the technological development in education in rural areas, the development of an education-to-employment pipeline by creating more employment opportunities for students, promoting international research collaboration and integrating artificial intelligence (AI) into the educational sector. "Budget 2026 is an opportunity to bring transformation in education by focusing on the key requirements for the nation’s future”.

Deloitte India Partner Saloni Roy says that apart from GST, she expects the government to deploy customs measures to support manufacturing and exports

“I expect initiatives to be introduced that support domestic manufacturing, potentially including rate rationalisation…Regarding the GST Council, decisions taken in recent meetings, such as on intermediary treatment and wholesale discounts, require amendments to the law,” she said.

Roy also noted that these amendments should be implemented alongside the budget, since many sectors, including pharma and agriculture face taxation issue.

She further explained that issue stems from output getting taxed at a lower rate, but the inputs getting taxed at a higher rate, which leads to an increase in costs.

"So the reduced rate, the output rate, doesn't really have the necessary effect. So I'm hoping that there will be certain measures taken to rectify this. I'm hoping the budget can address it..." she said.

Ankur Shrivastava, founder and managing partner at Momentum Capital, expects the Union Budget 2026 to prioritise financial support for deep-tech startups, a segment he believes is currently underfunded by the government. Here are the detailed expectations:

— India's 2026 budget should prioritize deep-tech startup support, especially on climate & health-tech innovation. The past initiatives for non-dilutive capital for startups have been commendable. However, the current amount of ₹10-50 lakhs is suitable for software or incremental product innovation but not science-backed breakthroughs.

— For deep-tech startups, like those in energy storage, new materials or advanced diagnostics, the allocated amount is insufficient to de-risk technology before moving to customer pilots.

— To maintain India's deep-tech trajectory, we look forward to a deep-tech focused DST grant equivalent with significantly higher grant ceilings ( ₹2–5 Cr) that reflect the reality of hardware innovation.

Prof. Subir Verma, Director of FORE School of Management feels that AI must move from the margins to the core of education policy and funding. Adding, “A forward-looking budget embedding AI into the education ecosystem will be critical in building globally competitive institutions and future-ready talent for India’s knowledge economy.”

• Strategic budgetary support is required to integrate AI across disciplines, not as a mere technical subject, but as a managerial, ethical, and decision-making tool that future leaders need to master.
• Investments in AI-driven research, simulation-based learning, and industry-academia collaboration will massively increase employability and innovation capacity.
• Funding in teacher training, data infrastructure, and responsible AI frameworks to ensure inclusive and ethical adoption.

Vikkas Goyal, Founder of VimanoTech feels Budget 2026 can enhance financial inclusion and expand credit access.

• Targeted refinements such as modest increases in standard deductions or allowances for housing, insurance, and retirement savings can improve disposable income, enabling households to borrow responsibly and invest in long-term financial goals.
• Clear policy, streamlined compliance, and regulatory certainty are critical to supporting scalable and efficient lending infrastructure, ensuring that banks and financial institutions can reach underserved segments while sustaining growth, innovation, and stability in India’s consumer finance and lending ecosystem.

Rajit Mehta, MD and CEO of Antara Senior Care believes the upcoming Budget can play a significant role in strengthening India’s senior care ecosystem through focused policy interventions.

• Expanding insurance coverage to include long-term care delivered through care homes and at-home services;
• Strengthening reverse mortgage norms to allow up to 80% of property value across city tiers.
• Granting the sector infrastructure status to improve access to affordable, long-term financing, encouraging quality capacity creation across cities.
• Exempting senior care services from GST or taxing them on par with healthcare, recognising their importance in helping seniors age healthily.
• Establishing a dedicated nodal agency would help bring policy coherence across states and departments.

Payas Agarwal, Director at Great Value Realty said that Budget 2026 presents a timely opportunity to unlock potential of India’s real estate sector, particularly in the luxury housing segment.

“We are expecting an introduction of a streamlined single-window approval system, along with measures to ease regulatory bottlenecks. This can significantly enhance project execution timelines and improve capital efficiency for both developers and homebuyers,” he added.

Gitesh Gupta, CEO, Aimlay feels the Budget should prioritise measures that would expand quality higher education, strengthen research ecosystems and the access and affordability for all students.

• Plus investments in research infrastructure, scholarships, and funding for doctoral and postgraduate studies, will transform India into a global knowledge hub.
• Focus of the policymaking on academic mentorship and industry collaborations, along with EdTech and lifelong learning policy frameworks, will go a long way in elevating the productivity of the sector.
• Align budgetary priorities with the goals of NEP 2020.

“As India readies for Budget 2026-27, it has become paramount that fiscal reforms are introduced proactively for the benefit of not only achieving macroeconomic stability but also for making the Indian workforce empowered as well. Open fiscal policies that outline pragmatic fiscal programming for managing deficits, combined with strategic public spending will allow for greater confidence among investors. Giving importance to governance that focuses on technology, green economic systems, and equal fiscal models will allow us to fortify the foundation of our economy. At SalarySe, it has become our primary concern that fiscal reforms that spread focus on spreading transparency, skill-building values, and equal opportunities, combined with greater use of credit on UPI, will help initiate earning for India’s workforce,” says Piyush Bagaria, Co Founder at SalarySe.

“In addition to GST reforms, the government could significantly lower the cost of technology adoption by doing away with the residual 7.5%–10% Basic Customs Duty and the 5% Health Cess on high-precision, non-indigenous technologies. Equipment such as Femtosecond lasers and advanced retinal imaging systems are critical for sight-saving procedures but remain expensive to import. Eliminating these landed costs will facilitate deeper penetration into Tier 2 and Tier 3 cities, ensuring that patients in smaller towns have access to the same world-class surgical offerings as those in metropolitan hubs,” says Dr Arun Singhvi, MD & Group CEO, ASG Eye Hospital.

“Recent changes in GST rates were a much needed breather extended by the government. We would expect the budget for 2026 to review the input credit availability for F&B restaurants, even if it is restricted to a few expenditure heads like Rent & Capital. Further, an incentive structure which is linked to employment generated for freshers to motivate the Industry, as retail being one of the largest employers in India,” says Barista Coffee CEO Rajat Agarwal.

“The Budget presents a timely opportunity to accelerate India’s progress toward ‘Viksit Bharat’ while reinforcing the domestic consumption cycle. Measures that support consumer sentiment and disposable incomes can provide a meaningful boost to demand across sectors such as retail and real estate,” says Raymond CMD Gautam Hari Singhania.

Dhruv Taneja, Founder & Global CEO, MatchLog feels that Budget must prioritize digital innovation and sustainability in inland container logistics to support rising exports and the $2 trillion ambition.

• Incentives for AI-driven platforms, EV trucking corridors, and Gati Shakti multimodal hubs can slash empty miles by 15%, reduce emissions, and optimize supply chains amid expanding manufacturing hubs.
• Prioritize incentives for technology-led freight networks, along with investments in shared inland infrastructure near industrial clusters and stronger multimodal linkages under Gati Shakti.
• Frameworks that accelerate AI-led visibility and end-to-end digital documentation will further ease port congestion and improve equipment productivity.
• A sustained policy push on EV adoption and green logistics, combined with clear data governance frameworks.

Praveen Sharma, CEO, REA India (Housing.com) feels that as India enters the next phase of urban and Tier-2 expansion, Budget 2026 is an opportunity to structurally boost housing demand.

“Continued focus on affordable housing, more practical home loan tax benefits, and faster approvals through digital governance will be critical to unlocking end-user confidence and sustaining momentum across the real estate sector,” Sharma said.

All India Gem & Jewellery Domestic Council (GJC), the apex body representing India’s domestic gems and jewellery trade, submitted its detailed pre-budget recommendations to Finance Minister Nirmala Sitharaman for consideration.

Expectations include:

• Reduction of GST on gold & silver jewellery from 3% to 1.25% (or a uniform 1.5% across the sector) on revenue neutral / equivalence ratio to offset inflation-driven tax burden and revive middle-class and rural demand.
• Refund of accumulated ITC on input services or reduction of GST on key input services (rent, security, logistics, etc.) from 18% to 5% to correct inverted duty structure.
• Clear circular affirming 5% GST on jewellery job-work services to protect karigars and prevent field-level harassment.
• One-year deferral of income tax on unrealised inventory appreciation caused by gold price rise in FY 2025–26, without interest.
• Exemption from capital gains tax on exchange of hallmarked jewellery when proceeds are reinvested in new jewellery.
• Immediate operationalisation of the Tourist GST Refund scheme at major airports to boost inbound tourism retail spending.
• Simplified compliance for MSME jewellers, including higher turnover thresholds for returns and protection from duplicate notices post-audit.
• Policy framework for digital gold, rationalised MDR on credit card transactions, and introduction of formal EMI for hallmarked 22-karat jewellery.

Dinesh Gulati, COO, IndiaMART InterMESH expects this Budget to complement past reforms:

• Budget 2026 right time to move to simplified GST structure, with an eased ITC structure and further reduction in refund timelines can contribute massively to the growth of not just the MSME sector, but the overall economy.
• Targeted loan programs for first‑time entrepreneurs, especially women, and other underserved groups can help in providing further relief on the credit front.
• Policy supports for rapid tech advancements and fuel the digitization, is strongly recommended.
• Recommend temporary duty-drawback or further extension of CGTMSE for exporters. Forex risk support or a temporary interest subvention scheme to be offered for specific export-oriented industries.
• Measures around health and environmental concerns and budget pushes for measures towards a greener economy.

Mohit Jandu, MD, J Infratech expects Budget 2026 to continue prioritising roads and highways in government capex, along with enhanced financial support to states and a refreshed National Infrastructure Pipeline.

“There will be growing focus on end-to-end digital transformation of the national highway network, from planning and Detailed Project Reports to construction, maintenance and tolling, leveraging digital mapping and validation tools to improve project coordination, speed up approvals and minimise ecological impact,” he added.

According to Man Mohit, CEO of AdSocial.ai, Budget 2026 should focus on simplifying taxation and enhancing disposable income in order to influence consumer behaviour and digital spending patterns.

• For the digital advertising ecosystem, even modest tax refinements that improve take‑home pay can translate into stronger demand across e‑commerce, local services, and emerging online markets.
• Clear policy direction and tax certainty will not only boost consumer confidence but also underpin sustained innovation and growth in India’s digital economy.

Viram Shah, CEO and Founder of Vested Finance feels upcoming Budget can enable smoother participation in global markets as more Indian investors view such opportunities as long term diversification strategy.

• Easing global investing under the LRS through measures such as building on the higher TCS threshold and rationalising TCS rates can enhance liquidity and make long term overseas allocation more seamless.
• Strengthening GIFT City as India’s global investment gateway complements these efforts.
• Clear tax neutral treatment for outbound investments and global funds can help India align with leading international financial hubs and encourage structured, goal-based allocation to global assets.
• Maintaining the $2,50,000 LRS limit provides stability, allowing investors to plan global diversification with confidence and discipline in a world of currency volatility and evolving capital flows.

Bhavin Patel, Co-Founder & CEO, Vartis Platforms feels that the Budget presents an opportunity to further strengthen financial inclusion through regulatory stability and sustained investment in digital public infrastructure.

• For regulated digital lending and P2P platforms, policy encouragement for responsible AI adoption.
• Continued collaboration between regulators and the fintech industry, along with predictable tax policies and streamlined compliance.
• Improving access to lower-cost funds for NBFCs and supportive policy environment for P2P lending can help broaden access to credit opportunities.
• Measures that enhance disposable income for the middle class can further boost consumption and sustain economic momentum.

Accoriding to Swarup Bose, Founder & CEO at Celcius Logistics, Budget 2026 can play a key role by accelerating investments in integrated logistics and cold chain infrastructure, which remain critical to reducing wastage, improving turnaround times and strengthening India’s agri and pharma supply chains.

• Targeted fiscal incentives for temperature-controlled warehousing, easier access to capital for tech-led logistics players, and deeper public–private collaboration can significantly enhance efficiency across the ecosystem.
• A focused push in these areas will not only support sectoral growth but also improve food security and India’s overall competitiveness as a global supply-chain hub.

Finance Minister Nirmala Sitharaman will present the Union Budget on February 1, 2026. Investors anticipate insights into fiscal strategy amid global economic shifts. Experts expect a decisive budget that fosters growth while maintaining fiscal discipline.

From fiscal deficit, income tax slabs to capex — here are five key things to watch out for in Nirmala Sitharaman's Budget 2026 speech. Read full here

In Budget 2025, acknowledging crucial role of the middle class in national development, Finance Minister Nirmala Sitharaman granted tax relief to individual taxpayers under the streamlined tax framework.

• For individuals earning up to ₹12 lakh in total income, there is no tax liability. This threshold was previously set at ₹7 lakhs.
• Additionally, the income brackets were adjusted, with the maximum tax rate of 30% now applying to income exceeding ₹24 lakhs, a limit that was formerly capped at ₹15 lakhs.

All taxpayers, whether individuals or corporations, are eager to learn about the tax reductions or impositions that the Finance Minister will outline in the Budget. However, experts believe that no changes will take place in the tax system.

Mohit Gulati, CIO and MD of ITI Growth Opportunities Fund believes that Atmanirbhar Bharat must mean scale. “The government should focus on defence, semiconductors, electronics, energy, real domestic capacity, not pilot projects or policy headlines,” he emphasised.

Analysts propose that emphasizing ‘Atmanirbhar Bharat’ in defence, along with integrating modern technologies such as artificial intelligence (AI), extends beyond just enhancing current systems.

Experts contend that increasing the defence budget should be regarded not just as a monetary choice, but as an essential strategic requirement.

• Motilal Oswal projects total expenditure is expected to rise by 7.0% YoY in FY27, reaching ₹52.9 trillion (or 13.4% of GDP).
• Mohit Gulati, CIO and MD of ITI Growth Opportunities Fund highlighted that it was time to unlock private capex. “Public capex has carried growth. The next leg depends on crowding in private capital through policy certainty, faster clearances, and risk-sharing,” he explained.

The government’s capital expenditure (capex) in India's Budget emphasises the creation of long-term assets such as infrastructure—roads, railways, and energy sources—to stimulate economic growth.

Recent budgets have shown considerable increases, with a notable allocation of ₹11.21 lakh crore (3.1% of GDP) for FY2025-26.

Motilal Oswal Financial Services feels that for FY27, the Union Budget is likely to be grounded in a nominal GDP growth projection of approximately 10.1%, providing some leeway to uphold fiscal discipline while fostering growth.

Investors in the financial markets will closely watch the GDP growth target for FY27. In relation to the Union Budget for FY2026, India's real GDP growth prediction was set at 7.4% for FY 2025–26, up from 6.5% in FY 2024–25.

Motilal Oswal Financial Services expects the Union Budget will represent a significant turning point in India's fiscal structure, with the gross fiscal deficit set at 4.3% of GDP, lower than the 4.4% targeted for FY26.

The fiscal deficit reflects the government's net borrowing needs for that year and is a crucial indicator of fiscal health. A reduced figure signifies improved management, as demonstrated by the FY25 result of 4.8% and the planned reduction for FY26.

For FY 2025-26, the target was established at 4.4%, aiming to decrease debt and promote growth.

Mohit Gulati, CIO and MD of ITI Growth Opportunities Fund believes that amid shifting global trade scenario and friction between India and the United States, Budget 2026 cannot afford ambiguity.

“This has to be a decisive Atmanirbhar Budget about strength, scale, and execution. This is not a populist budget. India has momentum. The job now is to compound it,” he feels.

• Budget 2026 marks Finance Minister Nirmala Sitharaman's ninth consecutive Union Budget presentation.
• The budget session kicks off on 28 January with a joint address by the President in Parliament.
• Key dates: Presentation of the Economic Survey on 31 January, Budget speech on 1 February, Budget session ends 2 April.

• 1 February: Nirmala Sitharaman will present the Budget 2026 at 11 AM at the Lok Sabha.
• 13 February: The first half of the Budget Session ends.
• 9 March: The second half of the Budget Session will begin on this day.
• 2 April: The final day of the Budget Session, after which Lok Sabha and Rajya Sabha will be adjourned sine die.

• 28 January: The Budget Session will commence at the Parliament with a joint address by President Droupadi Murmu to both the Houses.
• 29 January: According to the provisional calendar issued by the Lok Sabha Secretariat, the House will also meet on this day.
• 31 January: Sitharaman is expected to present the Economic Survey on this day. The Economic Survey, which presents a comprehensive state of the economy, is presented by the finance minister a day ahead of the Budget. The survey is prepared by CEA V Anantha Nageswaran.

Budget 2026 is significant because this is the 9th consecutive time FM Nirmala Sitharaman is set to present the annual financial statement. Next year, she will equal Moraji Desai's record of presenting 10 Budgets. Sitharaman is the only finance minister to have presented nine consecutive budgets.

Budget 2026 will also be the second full-fledged Budget of the third term of the Narendra Modi-led central government. Last year, Sitharaman presented the Budget in July after the government was voted to power.

The Union Budget is an annual exercise in which the Finance Minister lays forth the year's financial statement before both Houses of Parliament under Article 112 of the Constitution of India. The Budget typically contains the estimated annual receipts and expenditure of the following financial year.

The Union Budget also announces tax amendment proposals, key areas for expenditure and development, proposed policies, and reforms.

Union Finance Minister Nirmala Sitharaman is expected to present the Union Budget on Sunday (1 February), as per reports, despite confusion over whether the government would opt for either Saturday or Monday instead.

Union Minister Kiren Rijiju said that the decision will be taken by the Cabinet Committee on Parliamentary Affairs “at an appropriate time”, while PTI cited sources saying: “We have a fixed day for the presentation of the general budget. The concept of Sunday was brought by the British.”

Good morning and welcome to Mint's LIVE coverage ahead of the Union Budget 2026, as we bring you the latest news and updates and industry expectations ahead of the official announcement this year.