Union Budget 2026-27: Implications for Homebuyers, Developers, and Investors

Union Budget 2026-27 is presented by the Finance Minister at a moment when India’s real estate market is seeking direction rather than stimulus. Housing demand has remained resilient across major cities, but affordability pressures continue to shape buyer behaviour and investment decisions.

For homebuyers, attention is centred on tax provisions and borrowing costs that influence monthly repayments. Developers are assessing measures tied to project execution, funding access, and cost stability. Investors, meanwhile, are focused on signals around infrastructure spending and urban development, both key drivers of long term property demand.

As the Finance Minister Nirmala Sitharaman lays out fiscal priorities for the year, the Budget provides an early read on how housing and real estate fit into the government’s broader economic strategy.

Budget 2026-27: Live Updates        

Finance Minister Nirmala Sitharaman presented her 9th consecutive Union Budget:

• Budget 2026-27 is inspired by the 3 Kartavyas stated in Kartavya Bhawan.

• Nirmala Sitharaman stated that with Aatmanirbharta as the guiding principle, the government strengthened domestic manufacturing, improved energy security, and reduced reliance on key imports. She added that reforms focused on jobs, farm output, household spending power, and public services, supporting growth of about 7% and notable progress in reducing poverty and improving lives.

• The Finance Minister said four mineral-rich states, Odisha, Kerala, Andhra Pradesh and Tamil Nadu, will be supported to set up dedicated rare earth corridors for mining, processing, research and manufacturing. She referred to the rare earth permanent magnets scheme launched in November 2025 and added that a new plan will also help states create three chemical parks through a cluster-based plug-and-play model to boost domestic chemical production and cut import dependence.

• Nirmala Sitharaman said the Budget 2026 outlines action across six focus areas to keep growth strong. These include expanding manufacturing across seven key sectors, reviving traditional industries, strengthening MSMEs, accelerating infrastructure development, securing long-term economic stability, and developing city-based economic regions.

• Nirmala Sitharaman said the government focused on reforms, fiscal discipline, and public investment, while advancing Aatmanirbharta through stronger domestic manufacturing, energy security, and lower import dependence.

• Nirmala Sitharaman proposed raising public capital expenditure to ₹12.2 lakh crore for FY 2026–27 to sustain momentum in infrastructure investment. She also announced an Infrastructure Risk Guarantee Fund to support lenders during project development, plans to speed up CPSE real estate asset monetisation through dedicated REITs, and new freight corridors to enable greener cargo movement.

• The Finance Minister also presented the 16th Finance Commission report, detailing how tax revenues will be shared between the Centre and the states from 2026 to 2031.

• Nirmala Sitharaman proposed a new ₹10,000 crore scheme over five years to promote container manufacturing and build a globally competitive ecosystem for the sector.

• Nirmala Sitharaman announced a new dedicated freight corridor from Dankuni in the east to Surat in the west to support environmentally sustainable cargo movement.

• Nirmala Sitharaman announced plans to develop seven high-speed rail corridors between cities to promote sustainable passenger travel and strengthen economic connectivity.

• Nirmala Sitharaman proposed setting up a high-powered ‘Education to Employment and Enterprise’ Standing Committee focused on making the services sector a core driver of Viksit Bharat, with a target of achieving a 10% global share by 2047. The committee will identify priority areas for growth, employment, and exports, and examine how emerging technologies like AI will affect jobs and skill needs.

• Nirmala Sitharaman announced an additional ₹2,000 crore infusion into the Self-Reliant India Fund to help micro enterprises access risk capital. She also proposed measures to strengthen MSME liquidity, including mandatory use of TReDS for CPSE purchases, credit guarantee support for invoice discounting, linking GeM with TReDS for data sharing, and introducing ‘Corporate Mitras’ to provide compliance support for MSMEs.

• Nirmala Sitharaman said the Budget prioritises emerging technologies, especially AI, as engines of inclusive growth. She noted support through capacity building AI missions and other national initiatives such as the National Quantum Mission, the Anusandhan National Research Foundation, and dedicated R&D and innovation funds.

• Tax rules will be simplified through redesigned forms, making it easier for individuals to file and comply.

• The TCS rate is proposed to be reduced from 5% and 20% to a uniform 2%, including relief for education-related payments.

• Small taxpayers will be able to obtain a no- or nil-deduction certificate more easily, improving overall compliance confidence.

• Investors can submit Form 15G or 15H to multiple relevant companies, removing repetitive paperwork and easing the process across institutions.

• Nirmala Sitharaman told the House that the government has met its 2021-22 commitment to bring the fiscal deficit below 4.5% of GDP by 2025-26. The revised estimate for FY 2025–26 stands at 4.4% of GDP, matching the Budget Estimate, and is projected to ease further to 4.3% in FY 2026-27.

• The Finance Minister also said that the government plans raise ₹11.7 lakh crore in FY27 through dated securities to finance the fiscal deficit.

• Nirmala Sitharaman said the government accepted the 16th Finance Commission’s recommendation to retain vertical tax devolution at 41% and allocated ₹1.4 lakh crore for states in FY 2026–27.

• TDS on property sales by non-residents will now be deducted and deposited by resident buyers using a PAN-based challan, removing the need for a TAN and simplifying compliance.

• Individuals who did not disclose non-immovable foreign assets worth under ₹20 lakh will receive immunity from prosecution, with the relief applied retrospectively from 1 October 2024 to ease compliance for small holdings.

• The time to revise income tax returns will be extended from 31 December to 31 March on payment of a nominal fee. Filing timelines will also be staggered, with ITR 1 and ITR 2 due by 31 July, and non-audit business cases and trusts allowed to file until 31 August.

• Nirmala Sitharaman proposed a ₹20,000 crore outlay over five years to advance Carbon Capture, Utilisation and Storage (CCUS) technologies, aiming to scale projects and improve readiness for wider use across sectors.

• An outlay of ₹5,000 crore over five years will develop City Economic Regions. A Coastal Cargo Promotion Scheme aims to raise the share of inland waterways and coastal shipping from 6 per cent to 12 per cent by 2047.

• The Budget proposes dedicated REITs for CPSE real estate asset monetisation and provides incentives for large municipal bond issuances to strengthen urban infrastructure financing across cities.

• Nirmala Sitharaman raised the Electronics Components Manufacturing Scheme outlay from ₹22,999 crore to ₹40,000 crore and announced ISM 2.0 to deepen India’s semiconductor capabilities and reduce import dependence.

• In Property Tax Treatment (House Property), the wording has been changed from “for two years” to “up to two years” for nil annual value of house property.

• Assessment and penalty proceedings will be integrated into a single common order to reduce the multiplicity of proceedings and litigation.

• Taxpayers will be allowed to update their returns even after reassessment proceedings have begun by paying an additional 10% tax, useful in cases where property income or gains were missed earlier.

• Several technical compliance defaults have been decriminalised and converted into monetary fines, lowering compliance risks for landlords, small developers, and property investors.

Budget 2025-26 vs 2026-27

Below is the comparison of the 2025-26 and 2026-27 Union Budget:

Key Takeaways from Budget 2026-27

The Budget outlines multiple structural measures that influence urban growth, property demand, and investor confidence across real estate segments. Key takeaways from the Union Budget 2026-27 are mentioned below:

• Public Capex and Urban Focus: Public capital expenditure increased to ₹12.2 lakh crore, with continued focus on cities having populations above five lakh.

• City Economic Regions: City Economic Regions were introduced across Tier II, Tier III cities and temple towns to drive organised urban expansion.

• CPSE Asset Monetisation via REITs: Dedicated REITs announced to accelerate recycling of CPSE real estate assets.

• Freight Corridor and Waterways: Dedicated Freight Corridor from Dankuni to Surat and operationalisation of 20 new National Waterways to improve connectivity.

• Municipal Bond Incentive: ₹100 crore incentive for municipal bond issues above ₹1,000 crore under AMRUT to improve city funding capacity.

• Industrial Cluster Revival: Revival of 200 legacy industrial clusters, along with a container manufacturing scheme and three chemical parks.

• Data Centre Tax Incentive: A tax holiday till 2047 for foreign companies operating India-based data centres with safe harbour provisions.

• NRI Property TDS Simplification: PAN-based TDS mechanism for non-resident property sales to simplify compliance.

• Return Filing Relief: Return revision timeline extended to 31 March with the option to update returns after reassessment.

• Investor Compliance Ease: Depositories enabled to collect Form 15G and 15H across companies for investor ease.

• Decriminalisation of Technical Defaults: Several technical defaults related to books of accounts and TDS have been converted into fines.

• Corporate Bond Market Reform: Market-making framework and total return swaps introduced in corporate bonds to deepen debt markets.

Frequently Asked Questions: