Income Tax Updates
The Budget 2026 brought forth significant updates to income tax regulations. These included changes to the Income Tax Slabs, which have been a subject
of great interest to taxpayers. Additionally, adjustments were made to the deadline for revising Income Tax Returns (ITR), shifting it from December 31st to March 31st. Tax experts were seeking higher deductions and relief on the 30% tax slab. The new rules, including changes to income tax, are scheduled to take effect from April 1st. Many of these changes were anticipated by tax experts seeking reforms to reduce litigation and simplify compliance. Discussions also took place regarding the potential for joint taxation for married couples.
STT Hikes & Impact
A notable development was the increase in Securities Transaction Tax (STT) on futures, which rose from 0.02% to 0.05%. This increase was flagged by Nithin Kamath, highlighting its potential impact on market dynamics. The hike in STT had a significant impact, causing the Sensex to drop by 1,547 points, with the market shedding approximately Rs 10 lakh crore. Consequently, market sentiment took a hit, leading to increased volatility. The STT hike was one of the factors contributing to the market's downturn, shaking the stock market.
Market Reactions & Trends
The market displayed a mixed reaction to the budget announcements. The market experienced its worst month since February 2025, with the Nifty falling. The increase in STT contributed to a sell-off, with the MCX silver crashing and gold falling significantly, affecting investor confidence. Several experts suggested various investment strategies for navigating the market, given the prevailing conditions. The Economic Survey also emphasized the need for addressing social media addiction, which has been linked to anxiety, depression, and low self-esteem. There was a market settlement holiday planned, but trading was to continue.
Sector-Specific Highlights
The budget included specific measures to encourage various sectors. The government announced plans to boost infrastructure spending, with Capex being hiked to Rs 12.2 lakh crore in FY27. Industry leaders urged the government to double infra spending to Rs 3 lakh crore. Announcements regarding sovereign gold bonds offered tax clarity, with no tax exemption for secondary market purchases. Furthermore, adventure tourism received a push, with certain states expected to benefit. The focus was on capex, from manufacturing to infrastructure and AI, signaling a reform drive.
Expert Insights & Analysis
Experts shared their views on the budget, offering different perspectives on various aspects. Nirmala Sitharaman delivered the budget speech, which lasted for 1 hour and 25 minutes. Discussions revolved around making the new tax regime more attractive, with experts providing recommendations. The ICAI sought tax reforms to reduce litigation and make compliance easier. The Economic Survey also addressed tougher insurance enforcement, increasing the penalty cap to Rs 10 crore. Various analysts and economists offered their insights, providing a comprehensive view of the budget's implications for different stakeholders.
