'Look Beyond Taxes, See Who Benefits': FM Sitharaman On How To Read The Union Budget 2026

Finance Minister Nirmala Sitharaman on Sunday urged citizens, especially the youth, to look beyond tax rates when evaluating the Union Budget and instead focus on who benefits from its schemes and policy priorities.

Speaking at the Youth Dialogue on Budget 2026 in Delhi, Sitharaman said a Budget should not be viewed only through the lens of taxation.

“The Budget is not just taxes. It has a lot of schemes. One should ask whether these schemes address issues in one’s own life,” she said, adding that people should also examine the consistency of tax policies over time and the broader message they convey.

The finance minister said a key question for citizens should be whether Budget measures benefit specific sections such as the poor or the middle

class, and stressed that any perceived gaps should be highlighted.

She also noted that Budget documents today are far more transparent, allowing people to assess policy intent and outcomes more clearly.

Explaining the complexities involved in Budget-making, Sitharaman said governments often have to balance competing priorities.

Referring to defence preparedness, she said national security cannot be compromised and pointed to investments made over the past decade that proved critical during recent operations.

She contrasted this with earlier gaps in defence preparedness, underscoring how priorities evolve over time.

She also highlighted challenges in sectors such as agriculture, where farmers need fair prices for their produce while consumers seek affordability.

“These conflicting demands have to be managed. Providing subsidies at times becomes necessary,” she said, adding that every finance minister faces the task of balancing limited resources with rising demands.

Sitharaman said raising taxes is not always a viable option to mobilise resources, recalling the COVID-19 pandemic as an unprecedented crisis.

She said the government had decided against imposing additional taxes on citizens during the health emergency, choosing instead to borrow funds to ensure access to vaccines and save lives.

“Once recovery began and growth returned, our focus shifted to repaying debt so that future generations are not burdened,” she added.

Budget 2026

On the tax front, the finance minister announced today that income tax rates and slabs remain unchanged following last year’s major reforms.

However, she announced several steps aimed at easing compliance and providing relief to taxpayers.

Sitharaman also said the new Income Tax Act, 2025 will come into force from April 1, with rules and return forms to be notified shortly. The legislation will replace the six-decade-old Income Tax Act of 1961, with all tax changes announced in the 2026–27 Budget incorporated into the new law.

She said the new tax law is revenue-neutral and does not alter tax rates, but significantly simplifies direct tax provisions by reducing complexity and ambiguity.

The revised framework cuts the volume of text and sections by about half, with the aim of lowering litigation.

Among the key changes, the new law introduces a single “tax year” by removing the distinction between the assessment year and the previous year, and allows taxpayers to claim refunds of tax deducted at source even if returns are filed after the deadline, without penal charges.

Sitharaman said these reforms are intended to make the tax system simpler, fairer and more citizen-friendly.