Union Budget 2026 India — Key Highlights for Salaried Employees, Investors, and Businesses
India’s Union Budget for 2026-27 was presented in February 2026. Here is a first-principles breakdown of what changed and how it affects your finances.
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Income Tax Changes
- No change in tax slabs: New and old regime rates remain the same as Budget 2025.
- Standard deduction increased: Raised to ₹75,000 for salaried employees under new regime (from ₹50,000).
- 80CCD(1B) extended: Additional ₹50,000 NPS deduction available under new regime as well.
- TDS threshold raised: TDS on rent increased from ₹50,000/month to ₹60,000/month (Section 194-IB).
- Senior citizens: No TDS on interest income up to ₹1,00,000 (from ₹50,000) under Section 194A.
Investment & Market Changes
- Startup tax holiday extended: Eligible startups get 100% tax deduction for 3 consecutive years out of 15 years.
- Insurance FDI limit: Raised from 74% to 100% — more foreign players expected in Indian insurance.
- Green bonds: Government to issue ₹25,000 crore in sovereign green bonds for retail investors.
- Sovereign Gold Bonds: New tranche announced with 2.5% annual interest (unchanged).
Real Estate & Housing
- PM Awas Yojana (PMAY): ₹2 crore additional housing units targeted under PMAY Urban 2.0.
- SWAMIH Fund 2.0: ₹30,000 crore fund for stalled housing projects.
- Home loan interest deduction: No change — still ₹2L for self-occupied property under old regime.
The Smart Friend’s Verdict
Budget 2026 is a status-quo budget for most taxpayers. The biggest win is the ₹75,000 standard deduction under the new regime — if you earn ₹15L+, this saves you ₹7,800 in tax. The green bonds are worth watching for fixed-income investors. No major changes to capital gains, home loan deductions, or mutual fund taxation.
Next: ITR Filing Guide 2026 — file your returns with the new changes.