Union Budget 2026: What Gets Cheaper, What Costs More for Consumers

The Union Budget 2026-27 has brought several changes that will directly impact household spending, travel, education, healthcare, and daily consumption. Through revisions in customs duties, tax collected at source (TCS), tax deducted at source (TDS), and penalties, the government has made some items more affordable while increasing the cost burden on others.

Finance Minister Nirmala Sitharaman announced these measures while outlining the government’s effort to reduce compliance burden and support domestic manufacturing.

Everything That Gets Cheaper

Foreign education and medical treatment abroad
The government has proposed reducing the Tax Collected at Source (TCS) under the Liberalised Remittance Scheme (LRS) for education and medical purposes from 5% to 2%. Additionally, manpower supply services have been clearly brought under the TDS framework, with a lower deduction rate of 1–2%, reducing ambiguity and compliance hassles.

Overseas tourism packages
TCS on foreign tour packages has been proposed to be reduced to 2%, replacing the earlier structure of 5% on packages up to ₹10 lakh and 20% above that limit. Since the revised rate has no exemption threshold, it applies uniformly, lowering the initial cash outflow for travellers.

Leather and synthetic footwear
Customs duty rationalisation on raw materials and components used in footwear manufacturing will reduce production costs, making footwear more affordable for consumers. Additionally, duty-free imports are allowed for export production.

Energy transition equipment
Lower import duties on equipment used in renewable energy and clean transition technologies are aimed at reducing costs and accelerating green adoption.

Solar glass inputs
Duty reductions on key inputs used in manufacturing solar glass are expected to support domestic solar production and lower overall project costs.

Capital goods for critical minerals
Import duty relief on capital goods required for processing critical minerals is intended to strengthen supply chains and reduce costs for downstream industries.

Civilian aircraft manufacturing components
Lower customs duties on parts and components used in aircraft manufacturing are expected to support India’s aviation manufacturing ecosystem and reduce costs over time.

Microwave ovens
Reduced duties on certain components used in microwave ovens may lead to lower retail prices.

17 Rare Disease Drugs and Cancer and Diabetes-related Medicines
Customs duty exemptions or reductions on life-saving drugs for cancer and diabetes are aimed at making treatment more affordable for patients. Additionally, the reductions are also made for 17 rare diseases.

Goods for nuclear power projects
Basic Customs Duty (BCD) exemption on imports for nuclear power projects is expected to lower project costs and support clean energy goals.

Sports equipment
Duty relief on sports goods is expected to promote wider access and encourage sports participation.

Seafood
Lower duties on select inputs and products are expected to benefit exporters and consumers alike.

EV batteries
Reduced import duties on components and materials used in electric vehicle batteries are aimed at cutting EV costs and supporting clean mobility.

What Gets Costlier

Income tax misreporting
The penalty for misreporting income has been increased to 100% of the tax amount, tightening compliance enforcement.

Non-disclosure of movable assets
Failure to disclose movable assets will now attract stricter penalties, increasing the cost of non-compliance.

Stock options and futures trading
The Securities Transaction Tax (STT) on futures trading has been raised from 0.02% to 0.05%, making trading more expensive.

Umbrellas and parts
Higher duties on umbrellas and related components will raise prices.

Cigarettes and beedis
Increased duties aim to discourage tobacco consumption by making these products costlier.

Pan masala and gutka
Higher taxes on these products are intended to curb consumption.

Minerals
Duties on minerals (Kanhij) like iron, coal, and salt have been increased, which could impact downstream industries.