Union Budget Highlights 2026-27 - Finance Sector

The budget includes several measures to broaden and deepen India's financial markets:

Market-Making for Corporate Bonds:

1. A framework for market-making in corporate bonds will be introduced, along with total return swaps.

1. This will enhance liquidity and participation.

Incentives for Municipal Bonds:

For a single municipal bond issue exceeding Rs.1,000 crore by large cities, an incentive of Rs.100 crore will be provided, to encourage larger issuances.

REITs (Real Estate Investment Trust) for Public Assets:

1. The government will accelerate the monetization of real estate assets held by Central Public Sector Enterprises (CPSEs).

1. This can be done by setting up dedicated Real Estate Investment Trusts (REITs).

Increased NRI Investment Limits:

1. The investment limit for individual Persons Resident Outside India (PROIs) in the equity of listed Indian companies through the Portfolio Investment Scheme (PIS) has been increased from 5% to 10%.

1. The overall limit for all individual PROIs is raised to 24%.

Reforms for International Financial Services Centre (IFSC)

Extended Tax Holiday:

1. The tax holiday period for eligible units in the IFSC has been significantly extended from 10 consecutive years to 20 consecutive years.

1. This includes those involved in aircraft and ship leasing.

1. For the period after the holiday, the income will be taxed at a competitive rate of 15%.

Union Budget Highlights FY 2025-2026 – Finance Sector

1. The insurance industry's FDI cap will increase from 74% to 100%. Companies that invest the full premium in India will be eligible for this increased maximum. The existing restrictions and requirements pertaining to foreign investment will be examined and made simpler.

1. In rural areas, India Post Payment Bank's services would be extended and deepened.

1. A "Partial Credit Enhancement Facility" will be established by NaBFID for corporate bonds related to infrastructure.

1. The "Grameen Credit Score" framework will be created by public sector banks to meet the credit demands of rural residents and SHG members.

1. There will be a forum established for the development of pension products and regulatory cooperation.

1. There will be a forum established for the development of pension products and regulatory cooperation.

1. Procedures and requirements for expeditious approval of business mergers will be streamlined. Additionally, the process will be simplified and the scope of fast-track mergers expanded.

1. In 2024, we signed Bilateral Investment Treaties (BIT) with two nations as suggested in the Interim Budget. The present model BIT will be updated and made more investor-friendly to promote consistent foreign investment and in keeping with the idea of "first develop India."

Union Budget Highlights FY 2024-25 - Finance Sector

The highlights for Union Budget 2024-25 for the Finance Sector are as listed below:

The budget introduces tax exemptions for retail schemes and ETFs in IFSC, aligning them with specified funds. It also exempts certain incomes of the Core Settlement Guarantee Fund in IFSC.

Capital gains taxation has been overhauled with a focus on simplifying tax implications for non-residents. Long-term capital gains on listed securities above Rs.1.25 lakh will be taxed at 12.5%, while short-term gains on listed securities are taxed at 20%.

From 1 April 2025, unlisted debentures and bonds will be treated as short-term assets. Corporate tax rates for foreign companies have been reduced from 40% to 35%, with an effective rate of 38.22% including surcharge and cess.

Debt recovery tribunals are being strengthened and deepened to improve efficiency in resolving debt-related issues. The budget allocates Rs.1.5 lakh crore as interest-free long-term loans to states and plans to expand India Post Payment Bank with over 100 new branches in the North-east region.

There is a strong emphasis on boosting domestic manufacturing, reducing litigation, and facilitating trade. This includes enhancements to the GST framework, rationalization of customs duties, and abolishing the 2% Equalisation Levy on non-resident e-commerce operators effective from 1 August 2024.

Interim Budget 2024-25 Key Highlights in Finance

1. The total receipts for borrowings and total expenditure is estimated to be Rs.30.80 lakh crore and Rs.47.66 lakh crore respectively.
2. The tax receipts are estimated to be at Rs.26.02 lakh crore.
3. The outlay for the 50-year interest free loan scheme for capital expenditure to states will be continued this year at Rs.1.3 lakh crore.
4. The fiscal deficit in 2024-25 is estimated to be 5.1 per cent of GDP.
5. The gross and net market borrowings through dated securities during 2024-25 are estimated at Rs.14.13 lakh crore and Rs.11.75 lakh crore respectively which is lower than that of the financial year 2023-24.

Union Budget 2023-24 Key Highlights in Finance Sector

1. Finance commission sector has received 9% of share in budget 2023-24.
2. Income limit is increased from Rs. Five lakhs to Rs. 7 Lakh under the new regime.
3. Surcharge rate is reduced from 37% to 25% under the new regime.
4. Increased tax exemption limit to Rs. 25 lakh for non-government salaried employees.
5. Benefits of standard deduction are extended for pensioners and salaried class.

Union Budget 2021-22 Key Highlights in Finance Sector

1. Senior citizens who are above the age of 75 years have been provided tax benefits. Senior citizens who receive income via in interest and pension do not have to file income tax returns.
2. The time limit for reopening the assessment procedure has been reduced to 3 years. Earlier, the time limit was 6 years.
3. Tax holiday Extended to one more year for Affordable housing projects
4. Copper scrap Import duty reduced from 5% to 2.5%
5. Government cuts import duty on gold and silver from 12.5% to 7.5%
6. cotton Customs duty raised from 0 to 10%
7. Custom duty on solar inverters and solar lanterns raised.