Sun Feb 01 05:30:00 UTC 2026: ### Headline: Indian Budget 2026: Tax Relief for Medical and Educational Expenses Abroad, Increased STT on Share Transactions

The Story:

In the 2026 budget announcement, Finance Minister Nirmala Sitharaman unveiled significant changes impacting Indian citizens and non-resident Indians (NRIs). A key highlight is the reduction of the Tax Collected at Source (TCS) interest rate from 5% to 2% for medical and educational expenses incurred abroad. This move aims to make overseas education and medical treatment more affordable for Indians. Simultaneously, the government has exempted 17 cancer-related drugs from customs duty, further reducing healthcare costs. However, the budget left income tax slabs unchanged, disappointing taxpayers who anticipated an increase to ₹14 lakh annually.

The Finance Minister also announced the implementation of a new Income Tax law from April 1st, replacing the Income Tax Act 1961, designed to simplify tax processes. Furthermore, the requirement for NRIs to obtain a Tax Deduction and Collection Account Number (TAN) for property transactions in India has been eliminated. Conversely, the Securities Transaction Tax (STT) on share market transactions has been increased from 0.1% to 0.15%, leading to an immediate market downturn and losses for investors.

Key Points:

  • TCS interest rate reduced from 5% to 2% for medical and education expenses abroad.
  • 17 cancer drugs exempted from customs duty.
  • Income tax slabs remain unchanged.
  • New Income Tax law to be implemented from April 1st.
  • TAN requirement for NRIs purchasing property in India has been abolished.
  • STT increased from 0.1% to 0.15%, causing a market decline.

Key Takeaways:

  • The government is prioritizing making healthcare and education more accessible for Indians, particularly those seeking services abroad.
  • Efforts are being made to simplify the tax process for both residents and non-resident Indians.
  • Increased STT indicates a potential strategy to increase revenue generation from the stock market, although it carries the risk of market volatility.
  • No changes in the income tax will likely be disappointing for many taxpayers.
  • The new tax law should streamline tax filing.

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