Union Finance Minister Nirmala Sitharaman on Sunday presented her ninth consecutive Union Budget. With this, attention has shifted to items that will become cheaper or costlier for consumers.
The Finance Minister announced that sports equipment will become more affordable. She also said medicines used for the treatment of diabetes and cancer will be cheaper.
Items that got cheaper
- Leather products
- Mobile phones and EV batteries
- Microwave ovens
- Seventeen cancer medicines
- Solar panels
Customs duty and tax relief measures:
- Overseas tour packages: TCS rate cut from 5–20 per cent to 2 per cent
- Foreign education: Lower TDS under the Liberalised Remittance Scheme (LRS) for education expenses
- Shoe upper exports: Duty-free imports allowed
- Energy transition equipment: Basic customs duty (BCD) exempt
- Solar glass ingredients: BCD exempt
- Capital goods for critical minerals: BCD exempt
- Components and parts for civilian aircraft manufacturing: BCD exempt
- Microwave ovens: BCD exempt
- Personal-use imports: BCD reduced from 20 per cent to 10 per cent
- Drugs for rare and cancer diseases: BCD exempt
- Fish catch by Indian fishermen in Indian waters: BCD exempt
- Goods imported for nuclear power projects: BCD exempt
Items that got costlier
- Income tax misreporting: Penalty increased to 100 per cent of the tax amount
- Non-disclosure of movable assets: Now attracts a penalty
- Stock options and futures trading: Securities Transaction Tax (STT) raised from 0.02 per cent to 0.05 per cent
The prices of tobacco products like cigarettes, pan masala, and other similar products have increased due to an increase in excise duty and the imposition of a new cess. In the alcohol and trading category, the prices of alcohol have increased, but trading in futures and options (F&O) has become costlier due to an increase in the Securities Transaction Tax (STT).
Exemptions on import duties have also been revoked for some industrial machinery and products for which the country's manufacturing capacity is found to be adequate. This is a step towards promoting manufacturing in the country, but it may increase costs for some industries that imported such products at a lower cost.
NCCD rate revised on tobacco products without increasing effective tax burden
This amendment provides that the National Calamity Contingent Duty (NCCD) on specific tobacco products will be changed on paper from 25 percent to 60 percent from May 1, 2026, but without any change in the actual tax incidence paid by the manufacturers or consumers.
In simple words, while the rate of NCCD is being hiked, the government will reduce other elements of excise duty to keep the same effective duty. This is more of a technical change, which is often made to give the government flexibility in managing taxes without impacting prices.
This change will apply to chewing tobacco, jarda scented tobacco, and other similar tobacco products.
