Budget 2026 Highlights: Here’s the List of What Gets Cheaper and What Costs More

New Delhi, February 1: Finance Minister Nirmala Sitharaman presented her record ninth consecutive Union Budget today, unveiling a fiscal roadmap that prioritizes healthcare accessibility, domestic manufacturing, and the energy transition. While the budget offers significant relief for cancer patients and enthusiasts of digital technology, it adopts a sterner stance on "sin goods" and speculative financial activities. The 2026-27 Budget continues the government’s "Viksit Bharat" vision, balancing targeted customs duty cuts to lower the cost of living with increased levies on tobacco and market speculation to bolster revenue. No Change in Income Tax Slabs in Union Budget 2026.

What Gets Cheaper: Targeted Relief and Tech Incentives

Cancer Treatments: In a major move for public health, the government has fully exempted 17 essential cancer drugs from basic customs duty. This is expected to bring down the cost of life-saving treatments for thousands of patients across the country.

Rare Disease Medications: The exemption also extends to medicines used for treating seven rare diseases. This relief aims to support families facing high costs for specialized long-term care.

Mobile Phones and Chargers: The customs duty on mobile phones, PCBA (Printed Circuit Board Assembly), and mobile chargers has been reduced. This shift is intended to make smartphones more affordable while boosting the local assembly industry.

Solar Energy Equipment: To promote renewable energy, the list of exempted capital goods for use in the manufacture of solar cells and modules has been expanded. This will eventually lower the cost of installing solar power systems for residential users.

Electric Vehicle Components: The cost of Lithium-ion batteries is expected to drop following a reduction in duties on critical minerals like lithium, copper, and cobalt. This move is a direct effort to make EVs more competitive with traditional vehicles.

Kitchen Appliances: Certain domestic appliances, specifically microwave ovens, will see a price reduction. This follows a rationalization of duties on imported components used in local manufacturing.

Gold and Silver: The government has announced a reduction in customs duties on gold and silver to 6%, and platinum to 6.4%. This is intended to curb smuggling and provide relief to the jewelry industry and retail consumers.

Foreign Travel: For those planning trips abroad, the Tax Collected at Source (TCS) on overseas tour packages has been reduced to 2% (down from 5% and 20% earlier), significantly lowering the immediate upfront cost of international vacations.

Education and Medical Remittances: The TCS rate for sending money abroad for medical treatment or education under the Liberalised Remittance Scheme (LRS) has also been slashed from 5% to 2%, easing the burden on students and families. 8th Pay Commission News: Nirmala Sitharaman’s Budget 2026 Speech Leaves Central Government Employees Waiting Over Implementation of 8th CPC.

What Gets Costlier: Higher Levies on Tobacco and Trading

Tobacco Products: Cigarettes and pan masala will become more expensive as the government has increased the National Calamity Contingent Duty (NCCD). This "sin tax" hike is part of an ongoing effort to discourage tobacco consumption.

Stock Market Trading: The Securities Transaction Tax (STT) on futures and options (F&O) has been significantly hiked. STT on futures rises to 0.05%, while options will now attract a tax of 0.15%. This is designed to temper speculative retail participation in high-risk derivative markets.

Luxury Imports: Certain categories of luxury goods, including high-end imported watches and specific alcoholic beverages, will see a price hike due to a restructuring of basic customs duties aimed at promoting domestic alternatives.

Telecom Equipment: To protect domestic manufacturers, the basic customs duty on certain imported telecom equipment has been raised from 10% to 15%, which may lead to higher infrastructure costs for service providers.

Key Relief and Welfare Announcements

Support for MSMEs: The Finance Minister announced a new ₹10,000 crore SME Growth Fund to help small businesses scale up and navigate global trade headwinds. Additionally, the government has topped up the Self-Reliant India Fund by ₹2,000 crore to provide liquidity support to micro-enterprises.

Youth and Internships: To boost employability, the government is increasing the one-time stipend for the Prime Minister’s Internship Scheme. Interns will now receive a one-time grant of up to ₹8,000 (increased from ₹6,000) upon joining, alongside their monthly stipend of ₹5,000 for the duration of the 12-month program.

Simplified Compliance: A new Foreign Asset Disclosure Scheme was introduced as a one-time, six-month window for small taxpayers, including students and tech professionals, to disclose overseas assets below a certain threshold without heavy penalties.

Direct Tax Stability: While income tax slabs under both the New and Old regimes remain unchanged, the Finance Minister announced that the New Income Tax Act 2025 will come into effect from April 1, 2026, aiming to simplify the entire filing process and reduce litigation.

The 2026 Budget arrives at a time when India is navigating global trade volatility and domestic inflation. By rationalizing customs duties, the government aims to fix "inverted duty structures" where raw materials were previously taxed at higher rates than finished products. This strategy is intended to make Indian exports more competitive while providing relief to consumers in technology and healthcare.

(The above story first appeared on LatestLY on Feb 01, 2026 01:51 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).