Cigarette Excise Hike
From February 1st, a surge in excise duty will make cigarettes and related products more expensive. This increase is set to impact consumers nationwide.
The rise in excise duty has led to a decline in ITC stock to a 21-month low, as a block deal and tariff increases came into effect. Furthermore, the government's recent decision to raise excise duties on cigarettes and other tobacco products, following a seven-year freeze, indicates a shift in taxation policies. This move is expected to directly affect the prices of various tobacco products in the market, prompting consumers to adjust their spending habits. Additionally, the increase in excise duty has led to a decline in ITC stock to a 21-month low, reflecting market adjustments to the new financial landscape.
Stock Market Dynamics
The stock market in India exhibited notable movements. The Nifty concluded 2025 with a 10% gain, marking its tenth consecutive year of positive returns. Analysts predict a continuation of the market's upward trend into 2026. The rise in the market was driven by several key factors. Companies such as Vodafone Idea saw significant growth, surging 10% following substantial relief. Furthermore, the BSE and NSE observed holidays, which will be maintained in 2026. ICICI Bank, Yes Bank led the rally on the Bank Nifty. Also, the market experienced strong IPO activity, setting records globally. The primary market is projected to reach Rs 4 lakh crore in 2026 after a busy year, indicating substantial investor confidence and economic momentum.
Taxation and Finance
Several crucial financial deadlines were observed. December 31st was the final day for essential actions. Taxpayers needed to link their PAN cards with Aadhaar, file belated income tax returns, and finalize GST returns. For those who filed returns, there was an option to file updated or revised returns. Furthermore, income tax refunds faced delays. The income tax payout could get stuck if revised ITR was not filed by December 31, as per reports. Also, the new Income Tax Act 2025 is scheduled to become effective from April 1, introducing new regulations and requirements for taxpayers. Various schemes like the ICICI Bank Capital Gains Account Scheme were introduced to aid taxpayers in claiming exemptions and earning interest. In addition, the MCA has extended FY25 annual filings until January 31, without any late fees, to accommodate portal glitches.
Investment and Markets
The gold and silver markets showed volatility. The prices of both metals fluctuated, and gold prices hit new records. On December 27, gold rates increased, while silver prices recovered from a steep fall. The rise and fall of these precious metals often reflect market sentiments and economic conditions. Analysts shared their perspectives. Moreover, multiple IPOs launched, including ICICI Prudential AMC and others. The success of these offerings varied. New developments in the initial public offerings market were observed, with the Zepto IPO filing for a Sebi filing to raise approximately Rs 11,000 crore. In addition, personal loan growth was significant.
Banking and Lending
The banking sector showed robust performance in 2024–25. Double-digit growth and falling NPAs strengthened the Indian banks during that period. The government discussed PSU bank mergers with the RBI and PSBs, with more mega-lenders anticipated in 2026. Regarding lending, India's personal loan growth reached 35% in 2025. This was mainly driven by small-ticket loans. Also, government employees seeking to know the status of gratuity payouts and EPFO withdrawal rules saw developments. Several government initiatives and policies significantly influenced the lending and banking environment. Banks were open or closed on specific days, with the Reserve Bank of India issuing a detailed list of bank holidays for January 2026, which varied by state.
