Costlier: Higher STT on derivatives and tighter taxation on buybacks raise costs for traders and promoters; withdrawal of select customs exemptions may marginally increase import prices.
Cheaper for individuals: Lower TCS under LRS and a steep cut in customs duty on personal imports boost disposable cash for travellers, students and patients.
Healthcare relief: Full customs duty exemption on select cancer and rare-disease drugs improves affordability and access.
Budget 2026: What Gets Costlier And What Gets Cheaper
The Union Budget 2026 fine-tunes taxes and duties to discourage speculative activity while easing costs for households and priority sectors. Selective relief for consumers, healthcare and clean energy underscores the government’s long-term economic strategy.
Summary
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The Union Budget 2026–27 continues the government’s calibrated approach of fiscal prudence while subtly reshaping cost structures across sectors. Rather than sweeping rate hikes or giveaways, the Budget relies on selective taxation, duty rationalisation and incentives aligned with long-term priorities.
On the costlier side, market participants will feel the immediate impact. The increase in Securities Transaction Tax (STT) on futures and options raises transaction costs for active traders and proprietary desks, potentially curbing excessive speculative activity.
“Additionally, buybacks have been restructured to tax promoters more heavily, narrowing arbitrage opportunities and reducing post-tax returns from such capital distribution strategies. Certain imports may also become marginally expensive as long-standing customs exemptions are withdrawn where domestic manufacturing capabilities have matured,” says Ajay Kejriwal, Executive Director, Choice International.
Conversely, the Budget offers meaningful cost relief to households and growth sectors. A sharp reduction in TCS on overseas tour packages, education and medical remittances under LRS directly improves cash flows for individuals. Customs duty on personal imports has been halved, easing compliance and costs for international travellers. Importantly, full duty exemption on select cancer and rare-disease drugs reinforces the government’s intent to make healthcare more affordable.
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“From an industry perspective, clean energy, electronics and EV-related supply chains stand out as beneficiaries. Duty exemptions for lithium-ion battery manufacturing inputs, solar glass materials and electronic components are expected to lower costs over time and enhance India’s competitiveness. Relief for biogas-blended CNG further aligns taxation with sustainability goals,” says Kejriwal.
Overall, the Budget signals a clear message: speculative excess will be taxed higher, while consumption, healthcare, clean energy and domestic manufacturing will be supported. The real impact will unfold not in headline numbers, but in how businesses adapt to this evolving cost landscape.
(To be updated)
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