Budget 2026

Before the beginning of every financial year, the government of India prepares a budget. According to Article 112 of the Indian Constitution, the Union Budget is a statement of the estimated expenditures and receipts of the government for the upcoming financial year. In other words, it lays out a fiscal roadmap for the country for the next 1 year.

When does budget making begin

The budget-making process starts in August-September every year, that is, about 6 months prior to the date of its presentation. It needs to be passed by both houses of Parliament before the beginning of the financial year, that is, April 1 every year.

Pre-budget consultations

A few months before the budget, the finance minister starts conducting pre-budget consultations with various stakeholders to know about their proposals and demands. These stakeholders include bankers, agriculturists, economists, members of trade unions, state representatives, industrialists, representatives from various ministries and more.


After going through all recommendations presented by these stakeholders, the finance ministry allocates revenues to various departments for their future expenditures. The finance minister takes the final call on all the demands. It is also discussed with the Prime Minister before presenting in Parliament.

Budget documents

At the time of presenting the budget, certain key documents are tabled in the Parliament which include annual financial statements (AFS), demand for grants (DG) and Finance Bill.

Along with it some explanatory statements are filed for ready reference. These include expenditure budget, receipt budget, expenditure profile, budget at a glance, memorandum explaining the provisions in the Finance Bill, and output outcome monitoring framework.

What does budget focus on

Apart from providing estimates of revenues and expenditures for various departments, the Union Budget seeks to allocate funds to them for the coming fiscal.

In addition, the growth projections given by the finance minister, after taking into account the current status of the economy and factors responsible for it, is a key figure that people look up to.

Besides growth estimates, the budget gives projections and allocations for various sectors as well. It gives outlays for construction of new infrastructure in the country, in terms of railways, highways, waterways, airports, logistics infrastructure and more.

New allocations are also made for the agriculture sector, which is one the main contributors to India's GDP.

The micro, small and medium enterprises (MSMEs) sector has also been one of the prime focus of the government in the past few years. Skill development among youth and experienced class has also been a key objective of the Centre with a few to empower citizens to skill, reskill or upskill themselves.

With the Centre's 'Housing for All' scheme, the real estate sector receives a good boost in the budget every year. Further, banking and financial services and telecom, also receive prime allocations.

Tax regime

To take forward the policy of stable and predictable tax regime, the Centre has been introducing many measures to establish a trustworthy tax structure.

A new income tax regime was introduced a few years ago and it has undergone several changes since, with more favourable income tax slabs and income tax rates being introduced. The new income tax regime, which is also the default tax regime, also now offers a higher standard deduction limit and NPS benefits. However, some of the most popular deductions and exemptions available under the old income tax regime such as Section 80C, Section 80D, Section 80G, Section 80TTA are not available under the new tax regime.

With TOI's income tax calculator, users can find out which tax regime would be suitable for them and how much tax amount would they be liable to pay under both.