Union Budget 2026: A Calm Confident Focus on the Real Economy

It would be accurate to describe the 2026-27 Budget as a budget of perspectives, as it is explicitly built upon several strategic pillars and distinct viewpoints aimed at national transformation. At Ionic Wealth, we have looked at how the budget’s balancing acts - fiscal, strategic and policy - will impact diverse stakeholders differently.

The Luminaires’ Vantage Point:

Strategic initiatives for business titans and promoters, focusing on scaling manufacturing, easing compliance burdens, and rationalising the corporate tax landscape.

A new ₹10,000 crore SME Growth Fund will be established to incentivise enterprises along with a ₹2,000 crore top-up for the existing Self-Reliant India Fund. MSMEs are most impacted by US tariffs on Indian exports, hence this is a key support from the budget.

Rationalization of Minimum Alternate Tax provisions

- MAT rate cut: From 15% to 14% on book profits

- Final tax treatment: MAT becomes final tax, ending future MAT credit accumulation from 1 April 2026

- MAT credit usage: Brought-forward MAT credits may be set off only under the new tax regime up to 25% of tax liability for domestic companies

Tax holidays for IFSC units and OBUs have been extended to 20 years

Ionic View: Overall neutral to positive for Luminaires

The Disruptors’ Vantage Point:

For Founders, CXOs and professionals who are building the new India - one that competes globally on manufacturing and technology, the Budget is focused on reducing friction and enabling long-term ambitions.

1. Entrepreneurs in high-tech and frontier sectors may see benefits from dedicated missions.

• Electronic Component Manufacturing Scheme (ECMS) outlay is almost doubled to Rs. 400 Bn.

• India Semiconductor Mission 2.0 localises semiconductor equipment and raw materials, while exempting customs duties on critical inputs for aerospace and lithium-ion cell manufacturing.

• New ₹10,000 crore Fund of Funds to deepen AIF-led startup financing

• Biopharma SHAKTI with ₹10,000 crore to build Indian IP depth

2. Simplification of taxation of Buyback of shares

• Buyback proceeds to be taxed as Capital Gains - 12.5% (long-term) for regular investors, with higher effective rates of 22% for corporate promoters and 30% for non-corporate promoters

Ionic View: No change in ESOP taxation that the start-up ecosystem was hoping for, but the funds earmarked for sectoral investments show that the intent is progressive

The DRAGONs’ Vantage Point:

For Globally oriented Indians - the NRIs, and Indians with foreign assets, or those with international lifestyles, ease of participation and clarity shape capital flows.

• On Asset Disclosure, a one-time six-month scheme for small taxpayers to disclose undeclared foreign assets and get immunity by paying tax/fee.

• Investment limits for NRIs in Indian equities and stocks have been increased to 10% (from 5% earlier) under the PIS route. Overall limits have increased to 24% from 10%

• TDS on sale of property by NRIs: From 1 October 2026, resident buyers can now deduct and deposit TDS on the purchase of immovable property from an NRI using their PAN, without obtaining a TAN.

• On remittances, specifically for education or medical treatment, TCS on LRS has been reduced to 2% (earlier 5%) for an amount exceeding 10 lakh.

• On foreign travel, TCS has been rationalised to a uniform 2% for overseas tour packages, and the earlier minimum threshold of 10 lakhs has been removed.

• Non-resident experts under notified schemes will now be eligible for income tax exemptions on global income for a five-year stay, which enables better talent retention and international expertise for Indian firms.

Ionic View: incrementally positive steps outlined in the budget signal a clear intent to enable ease of capital inflows and outflows, along with global talent mobility

The Citizens’ Vantage Point:

Rationalising due dates for filing the return of Income to reduce filing congestion

- Individuals (ITR-1 and ITR-2): 31 July

- Non-audit business cases and trusts: 31 August

• The deadline for filing a revised return has been extended from 31 December to 31 March

• Taxpayers can file updated returns even after a reassessment notice is issued. If it is filed after a notice, the additional tax payable will increase by 10% of the tax and interest, but no penalty will apply on the income for which this extra tax is paid.

• Securities Transaction Tax (STT) increased on futures from 0.02% to 0.05% and on options (premium and exercise) to 0.15%; a clear signal of a preference towards long term savers rather than speculators

• Clarification that Capital gains exemption shall be available only for original subscribers of SGBs

• Interest on borrowings cannot be deducted as an expense against dividends or mutual fund income.

Ionic View: The previous Union Budget had Citizens as the central actor with significant Income Tax relief provided, hence the scope for more support stayed limited as expected. However, policy continuity is indicated in simplified compliance

The Sectoral Vantage Point:

Sectors that benefited

1. Pharma Innovation: ₹10,000 crore Pharma Bio-Shakti outlay announced over 5 years to strengthen Pharma Innovation and R&D
2. Private Banks: clear continued focus on Manufacturing and Infrastructure
3. Data Centre and Communications: A tax holiday till 2047 to any foreign company that provides cloud services to customers globally by using data centre services from India

Sectors that may be impacted adversely

1. PSU Banks: Central Government borrowing spike in FY 2026-27 (₹17.2T vs ₹16.3T expected): This raises bond yields and may hit PSU Bank treasury MTM
2. Defence and Aerospace: Defence budget for FY 26-27 came in at ₹7.85 Tn (up 15% over last year's budget, but lower than 20-25% as per industry estimates). High valuation posed a risk, leading to a 5-10% correction across stocks
3. Capital Markets: While there was no change in Capital Gains, STT has been hiked from 0.02% to 0.05% on Futures contracts and from 0.10% to 0.15% on Options - posing risks to brokerages and Exchanges’ revenue outlook due to reduced trade possibility

The Ionic Wealth Lens : Asset Allocation over Irrational Exuberance or Pessimism

Budget 2026 may not be loud.

But for those building, investing, and compounding over time, it quietly strengthens the ground beneath their feet.

This Budget reinforces three ideas:

Stay invested, but stay selective: This is an environment where balance sheets, cash flows and execution quality matter more than narratives.

Expect returns to come from allocation: With volatility structural and liquidity episodic, asset allocation will likely matter more than stock selection at the margin.

Respect the long game: Capital markets are being strengthened incrementally. The benefits of this show up over cycles, not quarters.

At Ionic Wealth, our Vantage Point has always been about seeing policy the way wealth creators experience it - not in isolation, but at the intersection of ambition, risk, and long-term outcomes.

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