Budget 2026 Expectations Live: Defence Stocks May Rally, Tax Relief for Salaried Class on the Cards

Union Budget 2026: Finance Minister Nirmala Sitharaman will present the Union Budget 2026 tomorrow, February 1. This will mark her record ninth consecutive budget. The presentation is scheduled for 11 AM in Parliament.

Key Expectations:

• The salaried class may see renewed income tax relief.
• Businesses hope for GST concessions.
• The budget will be accessible to the public via the ‘Union Budget Mobile App’ in both Hindi and English, reflecting the government’s focus on transparency and outreach.
• Increased defence spending could boost defence stocks.

Stock Market Will Remain Open on Budget Day
In line with tradition, the stock market will remain open on Sunday, February 1, 2026, for a regular trading session from 9:15 AM to 3:30 PM. However, since it is a settlement holiday, shares bought on January 30 cannot be sold on February 1, and stocks purchased on budget day cannot be sold the following day.

Defence Budget Set for Record Increase
The Ministry of Defence (MoD) has requested a nearly 20% increase in the budget for equipment purchases in FY2027—the largest single-year jump to date. Priority will be given to purchasing defence equipment manufactured in India, potentially driving up defence stock prices.

Income Tax Reforms May Continue
Budget 2026 is expected to further simplify income tax rules, enhance clarity, strengthen investor confidence, and encourage domestic investment. Experts expect the government to address key areas to maintain this momentum.

Healthcare Focus: Affordable Treatment
The healthcare sector hopes the budget will bridge the gap between national healthcare goals and affordable treatment for citizens. Digital technology adoption and tax relief on medical devices could lower healthcare costs, contributing to long-term health objectives and India’s vision of becoming a developed nation by 2047.

Travel and Aviation Sector Expectations

• The travel industry seeks easier tax rules for foreign travel, especially on TCS for cruise bookings, to make overseas holidays more affordable.
• The aviation sector is pushing for Aviation Turbine Fuel (ATF) to fall under GST, replacing excise duty and VAT, reducing operating costs and potentially lowering airfares.

Cryptocurrency Taxation
Interest in cryptocurrencies continues to rise. Under Section 115BBH of the Income Tax Act, 1961, transfers of Virtual Digital Assets (VDAs) are taxed at a flat 30%, plus surcharge and cess. Budget 2026 may focus on making crypto taxation simpler and clearer rather than stricter.

Cosmeceuticals Sector
The cosmeceutical industry expects the government to classify science-based skincare under healthcare rather than as cosmetic products, reduce GST, and clarify rules distinguishing medicines from cosmetics. This could lower prices for consumers and boost sales.

Affordable Housing
The real estate sector hopes Budget 2026 will promote long-term solutions for affordable housing rather than temporary relief, addressing structural issues in property acquisition and ownership.

Economic Outlook
According to the Economic Survey, India remains the fastest-growing major economy, projected to grow 7.4% in 2026, up from 6.5% in 2025. Growth is driven by increased investment and a rebound in manufacturing.

FMCG Sector Expectations
Leading FMCG players want measures to stabilize raw material costs and provide global market access, helping domestic companies navigate uncertainty and enhance competitiveness.

Reform Momentum
Ahead of the Economic Survey, PM Modi highlighted the government’s “Reform-Perform-Transform” approach, emphasizing rapid progress on structural reforms and India’s goal of becoming self-reliant and developed by 2047.

Revenue and Tax Base Growth
The Chief Economic Advisor noted strong revenue performance, supported by expanding direct tax collections. Gross tax revenue rose from an average of 10.8% of GDP (FY16–FY20) to 11.5% (FY22–FY25). Personal income tax collections increased from 2.4% of GDP pre-pandemic to 3.3% post-pandemic. The number of taxpayers grew from 6.9 crore in FY22 to 9.2 crore in FY25, reflecting better compliance and formalization of the economy.