Union Budget 2026-27 on February 1: Key Dates, Tax Relief, Priorities

The Union Budget 2026-27 will be presented on February 1, 2026, which falls on a Sunday, marking another milestone in India’s fiscal calendar. The budget will be tabled in Parliament by Finance Minister Nirmala Sitharaman at 11:00 AM in the Lok Sabha, according to Speaker Om Birla. The Budget Session of Parliament will begin on January 28 and continue till April 2, with a scheduled break between the two phases.

Budget Session dates and structure announced

The Budget Session will commence with the customary address by President Droupadi Murmu to the joint sitting of the Lok Sabha and Rajya Sabha. The first phase of the session will run from January 28 to February 13, while the second phase is scheduled from March 9 to April 2. In total, Parliament will hold 30 sittings during the session, providing ample time for detailed discussions on financial legislation.

Global economic shifts create opportunity for India

The 2026 budget comes at a time when the global economy is undergoing a structural reset. Tariff escalations by the United States and ongoing geopolitical tensions have disrupted traditional trade routes, prompting global companies to diversify supply chains. This realignment presents a significant opportunity for India to emerge as a trusted manufacturing and services hub.

Reflecting this confidence, India recorded foreign direct investment inflows of $19.04 billion into the manufacturing sector in FY2025, an 18% year-on-year growth. Sectors such as automobiles, telecom and chemicals have seen strong investor interest, strengthening expectations from the upcoming budget.

Key priorities of Union Budget 2026-27

The Union Budget, also known as the Annual Financial Statement, outlines the government’s estimated revenue and expenditure for the upcoming financial year. Infrastructure development is expected to remain a top priority, with capital expenditure for FY26 estimated at around ₹11.2 lakh crore, focusing on roads, highways, railways and public transport.

Defence spending is also likely to stay in focus amid rising geopolitical tensions. In the previous budget, the Ministry of Defence received nearly ₹6.81 lakh crore, accounting for about 13% of total central expenditure. Additionally, research and development is expected to see sustained support, building on initiatives such as the ₹50,000 crore National Research Foundation aimed at boosting innovation across sectors.

Income tax outlook: stability over major cuts

On the taxation front, experts do not expect sweeping changes in income tax slabs, especially after substantial relief was already announced in recent budgets. With tax collection growth remaining modest, the government is likely to prioritise stability over aggressive rate cuts.

However, minor adjustments could be considered, such as a marginal increase in deductions under Section 80C or selective changes in tax slabs for high-income earners.

What the middle class may gain

For middle-class taxpayers, income tax slab rates are expected to remain unchanged, particularly after the zero-tax threshold was raised to ₹12 lakh under the new tax regime in the previous budget. That said, analysts anticipate modest relief measures, including:

Small increases in deductions under Sections 80C and 80D
Additional relief on home loan interest
A possible hike in standard deduction, potentially raising the no-tax threshold to ₹13–14 lakh
Relaxation in the ceiling for interest deduction under Section 24(b)

EV incentives and green mobility push

While broad tax cuts may be limited, the budget is expected to offer targeted incentives linked to electric vehicles (EVs). These could include higher deductions on EV loans or a new EV-specific deduction category. The government may also announce measures to expand EV infrastructure and green mobility, aligning with India’s target of achieving 50% non-fossil fuel electricity capacity by 2030.

High-income earners, women and senior citizens in focus

For high-income individuals, experts expect rationalisation of surcharges and possible upward revision of income thresholds for higher tax slabs. With concerns over the migration of high net worth individuals, the government may consider reducing the effective tax burden to retain wealth and talent.

Senior citizens could see an increase in basic exemption limits and higher deductions on interest income under Section 80TTB. There is also speculation around partial tax exemption for certain pension payouts. Meanwhile, women taxpayers may benefit from targeted incentives to promote financial independence, entrepreneurship and retirement planning.

Overall, the Union Budget 2026-27 is expected to prioritise fiscal discipline, gradual reforms and alignment with long-term national goals, while offering calibrated relief to key sections of society amid global economic uncertainty.

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