Kolkata: Finance minister Nirmala Sitharaman will present the Union Budget for the next financial year on Sunday, Feb 1, 2026. Incidentally, this is the second time in independent India that the budget will be tabled in Parliament on a Sunday. The first time is happened was in 1999. This will also be the ninth budget for the FM and she is just one budget away from equaling former FM Morarji Desai’s record of 10 budget presentations.
When the FM presented the Budget in 2025, she had the onerous task of reviving the consumption process. She did her bit by providing significant income tax relief. As a result a salaried individual who earns up to Rs 12.75 lakh a year won’t have too pay any income tax at all in the new tax system. Then the GST reform followed in September and in the calendar year of 2025, RBI relaxed the Repo rate by 125 basis points to bring down the cost of borrowing.
Focus on capex, customs reforms, renewable energy
Those measures revived consumption significantly both in the urban and rural regions. This year, the FM faces the task of maintaining and, if possible, boosting the pace of consumption. There is near unanimity among experts that she needs to maintain the thrust on capital expenditure. This will give economic assets a push as also it will generate employment.
There is also expectation of a GST-style rejig of customs duties which is multi-layered and complex. The renewable energy sector is also expected to get a boost and the govt can extend various schemes as well as bring certain sectors under PLI to give this promising sector a push. The generation of employment will perhaps form the subtext of most of the Budget announcements, since it is one of the highest priorities of the Budget.
Income tax expectations
There is no expectation of big bang relief in income tax this year too. However, many analysts have point out two aspects. One, the standard deduction should be raised to Rs 1 lakh from the current level of Rs 75,000. Second, though the new income tax system has been designed to offer no tax deductions, many think the government should at least allow deductions on home loans. Home loans easily involve the biggest loan an average Indian takes and the burden has to be borne for a long period — usually 15 to 25 years. Therefore, a tax relief in the new system on home loans will help a large number of common taxpayers.