In Union Budget 2026 Part B, Finance Minister Nirmala Sitharaman announced sweeping income tax reforms, key fiscal deficit and debt targets, and multiple social-sector initiatives spanning disability support, mental healthcare, agriculture AI, and regional development.
Author: Aditya Pareek | EQMint | Budget 2026
Presenting Union Budget 2026 Part B, Nirmala Sitharaman announced a series of tax reforms, fiscal indicators, and targeted welfare initiatives aimed at improving ease of compliance, supporting vulnerable groups, and strengthening long-term economic governance.
Income Tax Act 2025 to Take Effect from April 1, 2026
A major announcement in Part B was that the Income Tax Act 2025 will come into force from April 1, 2026, marking a significant step toward simplifying and modernising India’s direct tax framework.
Among key tax-related proposals:
- Interest awarded by the Motor Accident Claims Tribunal to natural persons will be fully exempt from Income Tax, and TDS on such interest will be removed
- TCS rate for pursuing education and medical purposes will be reduced from 5% to 2%, easing the financial burden on families
- Introduction of a scheme for small taxpayers, enabling a rule-based automated process to obtain lower or nil deduction certificates
These measures aim to reduce litigation, improve taxpayer convenience, and enhance transparency.
Extended Timeline for Revising Income Tax Returns
To further support taxpayers, Sitharaman proposed extending the time available for revising income tax returns:
- Deadline extended from December 31 to March 31
- Subject to a nominal fee
This change provides greater flexibility to taxpayers while maintaining compliance discipline.
16th Finance Commission: Key Fiscal Numbers
Speaking on the 16th Finance Commission, the Finance Minister noted that ₹1.4 lakh crore has been provided to States for FY 2026–27, underscoring the Centre’s commitment to cooperative federalism.
Key fiscal indicators highlighted include:
Budget Estimates (BE) 2026–27
- Debt-to-GDP ratio: 55.6%
- Fiscal deficit: 4.3% of GDP
- Non-debt receipts: ₹36.5 lakh crore
- Total expenditure: ₹53.5 lakh crore
Revised Estimates
- Non-debt receipts: ₹34 lakh crore
- Total expenditure: ₹49.6 lakh crore
These numbers signal a calibrated path toward fiscal consolidation while sustaining developmental expenditure.
Dedicated East Coast Industrial Corridor and Northeast Focus
Sitharaman announced the proposal for a dedicated East Coast Industrial Corridor, with an interconnected node at Durgapur, aimed at boosting manufacturing, logistics, and regional economic integration.
Shifting focus to the Northeastern region, she proposed a scheme to develop Buddhist circuits across:
- Arunachal Pradesh
- Sikkim
- Assam
- Manipur
- Mizoram
- Tripura
This initiative seeks to promote tourism, cultural heritage, and regional development.
Mental Healthcare: NIMHANS 2.0 and Institute Upgrades
Addressing mental healthcare and trauma care, the Finance Minister announced:
- Establishment of NIMHANS 2.0
- Upgradation of National Mental Health Institutes in Ranchi and Tezpur
These measures aim to expand access to quality mental healthcare services and strengthen institutional capacity nationwide.
Divyaang Sahara Yojana for Persons with Disabilities
To support persons with disabilities, Sitharaman announced the Divyaang Sahara Yojana, which will:
- Ensure timely access to high-quality assistive devices for eligible divyaangjan
- Scale up domestic production of assistive devices
- Support setting up of modern retail-style centres for purchasing assistive equipment
The scheme is designed to improve accessibility, affordability, and dignity for persons with disabilities.
Launch of Bharat Vistar AI Tool for Agriculture
In a major digital agriculture initiative, the Finance Minister announced the launch of Bharat Vistar, a multilingual AI tool.
The platform will:
- Integrate the AgriStack portal
- Connect ICAR portals on agricultural practices
- Leverage AI systems to provide farmers with real-time, actionable insights
The initiative aims to enhance productivity, decision-making, and knowledge dissemination in the agriculture sector.
She-Marts to Empower Women Entrepreneurs
Sitharaman also announced the launch of She-Marts, described as community-owned retail outlets operating within cluster-level federations. The initiative is aimed at:
- Strengthening women-led enterprises
- Improving market access for self-help groups
- Promoting inclusive and localised economic growth
Conclusion
Union Budget 2026 Part B reflects a strong focus on tax simplification, fiscal discipline, social inclusion, and technology-driven governance. From the rollout of the Income Tax Act 2025 and targeted tax reliefs to major welfare initiatives in disability support, mental healthcare, agriculture AI, and regional development, Finance Minister Nirmala Sitharaman’s announcements outline a comprehensive framework for sustainable and inclusive growth.
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Disclaimer: This article is for informational and educational purposes only. Budget proposals and fiscal announcements are subject to parliamentary approval, detailed rules, and subsequent notifications. Readers are advised to consult qualified professionals for tax, financial, or policy-related decisions.
