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Finance Minister Nirmala Sitharaman's Budget 2026 attracted mixed reactions, with markets fretting over sharp hikes in transaction taxes on derivatives and economists praising the record capex and the government minute emphasis on smaller segments of the economy. The announcements came with Dalal Street open for business in a special Sunday trading session on February 1. Zee Business Managing Editor Anil Singhvi has decoded the 10 biggest announcements from the Budget speech of 2026.

Big Announcement #1 | Centre firm on fiscal consolidation path

The Budget 2026 pegs fiscal deficit -- the difference between government expenses and government revenue -- at 4.3 per cent of GDP in FY27 (which begins on April 1), narrowing a further 10 basis points from a projected 4.4 per cent in the current financial year.

Gradual reduction in fiscal deficit signals the government's improving financial position, as it has to borrow less money from the market to bridge the shortfall between its spendings and earnings.

A narrowing fiscal deficit indicates greater fiscal discipline, signalling lower debt-to-GDP ratio and reduced inflation pressure. These are viewed as good economic conditions.

The market guru pointed out that the government's fiscal deficit target for FY27 is along expected lines.

Big Announcement #2 | Record capex

The second biggest takeaway from this year's Budget is an all-time high capital expenditure of Rs 12.2 lakh crore for FY27, marking a rise of 8.8 per cent over the previous year.

The finance minister noted that the higher capex is aimed at continuing the momentum in infrastructure development and supporting overall economic growth.

Sitharaman also underlined that infrastructure remains a key focus area for the government.

The market guru said that the record capex is also in line with expectations.

Big Announcement #3 | Buybacks to attract capital gains tax

The finance minister proposed to tax share buybacks as capital gains. Earlier, capital gains arising out of buybacks were taxed in accordance with the respective income tax slabs.

Once the proposal comes into force, short- and long-term capital gains (STCG and LTCG, respectively) will apply to those gains depending upon the holding period.

The market wizard said that this is a positive move for retail investors, who will now pay the tax rate of 12.5 per cent (LTCG) or 20 per cent (STCG) based on the holding period and not on the basis of their overall income.

Big Announcement #4: Securities transaction tax hiked on futures

The Budget 2026 raises the securities transaction tax (STT) -- a direct tax on trading charged per transaction -- on futures trading by 150 per cent to 0.05 per cent from the current 0.02 per cent.

Authorities have been taking steps to discourage retail investors from trading in high-frequency instruments -- like derivatives -- blindly. Over the years, capital market regulator SEBI has undertaken various studies on investor behaviour to educate newer retail investors.

Big Announcement #5: Securities transaction tax hiked on futures

The Budget 2026 also raises the STT on options trading significantly, taking it to 0.15 per cent on options premium and exercise of options from the existing 0.1 per cent and 0.125 per cent, respectively.

Dalal Street took Budget Day announcements on a sluggish note. Singhvi attributed the overall weak market reaction mainly to the STT proposals.

STT has been raised "too much, too fast", he said.

Big Announcement #6: A tax boost for Cloud service providers

The Budget proposes to grant a tax holiday to foreign cloud service providers through data centre services in India till 2047 under certain conditions.

The companies will need to provide services to Indian customers through an Indian reseller entity, explained the finance minister.

Big Announcement #7: Focus on strategic sectors

The Budget 2026 mentioned enhanced manufacturing in seven strategic sectors.

Big Announcement #8: REC and PFC to be restructured

The government will restructure two major PSUs -- REC and PFC -- as part of its broader vision to strengthen public sector financial institutions.

Both PSUs play a key role in funding power generation, transmission and distribution projects in the country.

Big Announcement #9: Easier rules for individual overseas investors

The Budget has doubled an investment limit applicable to persons resident outside India (PROIs) -- a broad term used for non-residents including non-resident Indians (NRIs) and persons of Indian origin (PIOs) -- to 10 per cent.

Now, the maximum permissible holding in a Dalal Street-listed company for an individual PROI is 10 per cent, instead of the existing 5 per cent.

Big Announcement #10: Aggregate cap raised too

It also proposes to raise the overall combined limit for all individual PROIs to 24 per cent from the current 10 per cent.

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