The Union Budget presented in February 2026 was a relatively calm one for markets — no major surprises on capital gains, a widened new tax regime, and continued capex focus. Here are the parts that actually matter for your money.
New tax regime tweaks
The standard deduction under the new regime was raised to ₹85,000 from ₹75,000. The basic exemption limit stayed at ₹3 lakh, but the 5% slab now extends to ₹4 lakh. For most salaried earners, this translates to a modest ₹2,500–5,000 annual tax saving. The old regime was not touched — it still exists but continues to lose relevance for new filers.
Capital gains: no change
Markets feared another change to LTCG rules after the 2024 tweaks. The budget left capital gains untouched — LTCG on equity above ₹1.25 lakh is still taxed at 12.5%, STCG at 20%, and debt fund gains taxed at slab rate regardless of holding period. Stability is welcome after the recent churn.
Infrastructure and capex
Capital expenditure outlay rose to ₹12.2 lakh crore, a 9% increase. Railways, roads, and urban infrastructure remain the priority areas. Capital goods and cement stocks traded higher on the announcement, though the gains faded over the following weeks.
Tax on F&O trades
The STT on equity futures and options was hiked marginally. This continues SEBI's broader effort to discourage retail F&O gambling, which has ballooned to dangerous levels. The hike is symbolic more than punitive, but the direction of travel is clear.
Angel tax abolition, continued
Following the 2024 abolition of angel tax for domestic investors, the 2026 budget cleaned up the remaining rules for international investors. This is a quiet but important win for Indian startups raising funds from global VCs.
What to do with this
Most retail investors should see modest tax savings and no structural change to their investing approach. If you were heavily using the old tax regime, evaluate whether the widened new regime now works better — most salaried filers under ₹25 lakh income will benefit from switching. Our goal planner accounts for post-tax returns if you want to re-run your plans under the updated numbers.