Union Budget 2026: What Gets Cheaper, What Gets Costlier Explained

As Finance Minister Nirmala Sitharaman revealed the Union Budget 2026–27, the focus has shifted to the practical impact; which items and transactions are set to become cheaper, and where costs are likely to rise for households and businesses.

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Here’s what the Budget makes cheaper and more expensive, based strictly on the speech of Finance as she unveiled the Union Budget 2026-27.

What gets cheaper after Union Budget 2026 announcement

1) Overseas tour packages: lower TCS, lighter upfront outgo

The Budget proposes a 2% TCS on “overseas tour programme package” (covering travel, hotel stay, boarding/lodging and related expenses).
Key Takeaway: TCS is collected upfront, so a lower rate means less money blocked at the time of booking.

2) LRS for foreign education and medical: TCS cut to 2%

For remittances under the Liberalised Remittance Scheme (LRS) beyond ₹10 lakh in aggregate, the Budget proposes:

• 2% TCS for education or medical treatment (reduced from 5%)
• 20% TCS for other purposes (unchanged)

Key Takeaway: If you fund a child’s overseas education or send money for medical reasons, the upfront deduction drops sharply.

3) Technology, Energy and Industry:

Consumer Electronics: Specified parts used in the manufacture of microwave ovens are now exempt from basic customs duty.

Renewable Energy: Capital goods used for manufacturing Lithium-Ion Cells for battery energy storage systems and sodium antimonate (used in solar glass) are exempt from basic customs duty.

Nuclear Power: Customs duty exemptions for goods required for nuclear power projects are extended and expanded to all plants regardless of capacity.

Aviation and Defence: Components and engines for civilian aircraft, as well as raw materials for the maintenance, repair, or overhaul of aircraft in the defence sector, are exempt from basic customs duty.

Critical Minerals: The import of capital goods for processing critical minerals and the import of Monazite are now duty-free.

Biogas: The value of biogas is excluded from Central Excise duty when blended with CNG.

What gets more expensive

1) F&O trading: STT goes up

The Budget proposes to raise:

• STT on futures to 0.05% (from 0.02%)
• STT on options premium and exercise to 0.15% (from 0.1% and 0.125% respectively)

Key Takeaway: This is a direct cost increase for derivatives traders. Even small changes add up when turnover is high. Also, if we look from a perspective it is to discourage F&O trading among the retail investors.

2) Share buybacks: tax treatment changes, promoters face higher effective rates

The Budget proposes that consideration received on buyback will be taxed under “Capital Gains” instead of dividend income.
 It also proposes a differential effective rate for promoters: 22% for promoters that are domestic companies, and 30% for promoters other than domestic companies.
Key Takeaway: Buybacks are often used as a shareholder return tool. Changing the tax mechanics can alter how companies and promoters approach them.

3) TCS on certain goods: higher collections can tighten cash cycles

TCS rates on specific goods are proposed to be rationalised to 2%:

• alcoholic liquor for human consumption: 1% → 2%
• scrap: 1% → 2%
• minerals (coal/lignite/iron ore): 1% → 2% …and tendu leaves reduce from 5% to 2%.

Key Takeaway: For businesses dealing in these categories, a higher TCS rate can mean more cash getting parked upfront. That can squeeze working capital, even if it is adjusted later.

4) Select imports: higher customs duty or “minimum duty” floors

The annexure lists a set of increases/modifications (with effect from 02.02.2026), including:

• Potassium hydroxide: Nil → 7.5%
• Umbrellas: 20% → 20% or ₹60 per piece, whichever is higher
• Umbrella parts/accessories: 10% → 10% or ₹25 per kg, whichever is higher

Key Takeaway: The “whichever is higher” structure can make low-priced imports costlier even if the headline percentage looks unchanged.

5) Sovereign Gold Bonds Exemption Condition

Sovereign Gold Bonds (SGBs) capital gains exemption will be available only when an individual subscribes at the time of original issue and holds continuously until redemption on maturity; it applies uniformly across SGB issuances by the Reserve Bank of India.

Key Takeaway: By specifying that the exemption applies only to those who subscribe at the original issue and hold until maturity, the policy prioritises long-term individual investors.