The Union Budget for 2026-27 as presented by the Finance Minister, Nirmala Sitharaman, contains some good news for consumers (the household) and will also contain higher taxes on certain goods/services therefore causing costs to go up.
Income tax slabs remain unchanged with focus on growth/capex. Therefore, the budget aims to provide both relief for consumers as well as higher collections of revenue.
Here are clear examples of what will become less expensive and what will become more expensive after 2026, according to budget.
Less Expensive:
1. Cancer and Rare Diseases Medications
The Budget has completely eliminated basic customs duty on 17 cancer medications. In addition it has eliminated basic customs duty on 7 different types of medication and food for the 7 rare diseases. This will reduce the cost to patients of treating these diseases.
2. International Travel and Education
The TCS rate for international tour packages has been reduced from 5% down to 2%.
The TDS rate under LRS for educational institutions located outside of the ensuring countries has been reduced. Thus, the costs of international travel and educational opportunities outside of India will be less expensive.
3. Household Appliances
Microwave Ovens have been exempted from basic customs duty so they will become less expensive for consumers at the retail level.
4. Electronics and Renewable Energy
- Smartphones & Tablets Made In India
- Lithium-Ion Batteries
- Solar Glazing
- Critical Minerals
- Support For Local Manufacturing & Clean Energy
5. Aviation & Recreational Equipment
- Duty-Free Civilian Airplane Parts & Training Use
- Khelo India Initiative May Reduce Prices On Sports Equipment In India
6. Other Products
- Leather Footwear
- Textiles & Fabric Garments
Seafood Exports To Overseas Customers
- Biogas-CNG Blended Fuel
- Shoes and Footwear Made From Blended Materials
Items that are expected to increase in price
1. Luxury Goods & Alcohol
High-end watches, alcoholic beverages, and premium-priced products are expected to increase in price due to new taxes.
2. Coffee Machines
Specialized coffee brewing and vending machines will cost more after GST tax credits have been eliminated.
3. Fertilizers
After the removal of duty-free import credits for agricultural chemicals and pesticide products, farmers could face higher production costs.
4. Equity Trading Costs
Higher costs of trading derivatives are expected to result from an increase in the amount of STT (Securities Transaction Tax):
Futures STT: 0.02% ➔ 0.05%
Options STT: 0.1% ➔ 0.15%
As A Result, More Active Traders Will Have To Pay Higher Costs To Trade.
5. Income Tax Penalties
Penalties for incorrectly reporting your personal tax will increase to 100% of the amount of tax you owe as a a result of enforcement actions by the tax authorities.
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Will imported wines be get cheaper?
Though increased tariffs on alcoholic beverages have impacted imported wines, the India and EU agreement contains provisions to ease the impact of these tariffs. Tariffs on most goods will be lowered through this agreement.
As a result of this agreement, the cost of imported wines, beers, juices, prepared foods, etc… from Europe will be considerably less expensive than before.
Governmental Opinion
The Prime Minister has labelled this year’s Budget as one that emphasises growth and improvements. The Government anticipates that by lowering tariffs on essential goods and increasing investments into infrastructure, this Budget will promote or assist in the long-term development and viability of India.
The Budget for FY 2026 -27 includes Tariff Reduction for medicines, electronics, travel and renewable energy, thus benefitting middle-class families and individuals accessing health care. In addition, creating a deficit in the above categories may cause some households to have difficulties affording.
The total outcome is that households will be able to afford necessary household items and health care to a greater extent than they could when they were charged a higher duty, as opposed to discretionary items and luxury goods.
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