The Yuva Shakti-driven Budget is focused on poor, underprivileged & disadvantaged via
Three Kartavyas :

• First Kartavya         : Accelerate and Sustain Economic Growth
• Second Kartavya   : Fulfil Aspirations of the People
• Third Kartavya        : Sabka Saath, Sabka Vikas

The FINMIN defined the Budget into three key segments to support these Kartavyas:

• Sustaining the momentum of Structural Reforms
• Robust and resilient Financial Sector
• Cutting-edge technologies, including AI applications

The pillars of growth and development outlined in the Budget include sustaining economic growth, strengthening the foundations of growth, people-centric development, trust-based governance, ease of doing business and ease of living, and fiscal matters.

Key announcements were focused on 7 Strategic and Frontier Manufacturing Sectors, renewing the emphasis on Services Sector and Increasing farmer’s income by enhancing productivity in agricultural and allied sectors along-with new women-oriented reforms like Self-Help Entrepreneur (SHE) Marts and Khelo India Mission.

Sectorial Highlights

• Content creator labs in 15,000 schools & 500 colleges to meet 2 million jobs by 2030
• Focus on creative industries: Animation, VFX, Gaming, Comics (AVGC)
• 5 university townships near industrial & logistics corridors
• A girls' hostel in Higher Education STEM institutions in every district
• Setting up or upgrading of four Telescope Infrastructure facilities.

• Capital expenditure for FY27 has been increased to ₹12.2 lakh crore, with a special emphasis on the development of Tier-2 and Tier-3 cities.
• 20 new national waterways to be operationalised in 5 years for green cargo transport.
• Financing and asset optimization through dedicated REITs and the Infrastructure Risk Guarantee Fund.
• Skill development: Regional Centre's of Excellence for infrastructure workforce.

• Seven high-speed rail corridors proposed to enable fast, clean, and sustainable passenger transport
• National Institute of Hospitality; upskilling 10,000 guides at 20 iconic sites
• National Destination Digital Knowledge Grid for heritage and cultural sites
• Sustainable trekking, hiking, wildlife, turtle & bird-watching trails across key regions
• Government plans ₹2.5 lakh crore investment in trains, tracks, and stations.
• Development of Buddhist Circuits in North East Region

• Develop dedicated rare earth corridors in mineral-rich states under the 2025 scheme.
• Building on Lakpati Didi, women will be supported to become enterprise owners through SHG entrepreneur marts.
• One-time measure to allow SEZ units to sell to domestic market at concessional duty.
• Aims to utilize SEZ capacities amid global trade disruptions.
• Rare earth corridors in Odisha, Kerala, Andhra Pradesh, and Tamil Nadu to promote mining and manufacturing.
• ISM 2.0, expanding India's semiconductor push, outlay of Rs. 4000 crore to include equipment and materials manufacturing, full-stack design with Indian IP, stronger supply chains, and industry-led RGD and training to build a skilled workforce.
• Setting up of mega textile parks, integrated textile programme including national fibre Scheme, Textile Expansion & Employment, Handloom & Handicraft support with focus on value addition to technical textiles.
• Outlay of Rs 20,000 cr proposed for launch of carbon capture and utilization scheme across sectors like steel and cement.
• Text-ECON for global competitiveness, SAMARTH 2.0 for skilling, and Mahatma Gandhi Gram Swaraj to boost rural artisans and ODOP initiatives.
• With an outlay of ₹40,000 crore, this initiative aims to build on earlier successes and fast-track growth in the semiconductor sector.
• Rs. 100 crore incentive announced for single municipal bond issuances above ₹1,000 crore to encourage large-city participation.

Direct Taxation Highlights

• MAT not applicable to non-residents, paying tax on presumptive basis
• MAT proposed to be reduced under New regime from 15% to 14% and made final tax
• MAT carry forward discontinued w.e.f. 1st April 2026
• Allowance of set-off of brought forward MAT credit to companies shifting to new tax regime to the extent of 1/4th of the tax liability in the new regime

• Common order for assessment and penalty
• No interest liability on penalty for period of appeal, irrespective of outcome
• Pre-payment to be reduced from 20% to 10% and to continue to be calculated only on core tax demand only
• Immunity from penalty and prosecution even in case of misreporting of income, upon payment of additional 100% income tax
• Immunity from prosecution with retrospective effect from 1st Oct 2024, for non-disclosure of non-immovable foreign assets upto Rs. 20 lakh
• De-criminalisation of non-production of books of account and documents and TDS payment
• Settlement of technical disputes by paying an additional amount in lieu of penalty
• Prosecution proceedings to be simplified
• Simple imprisonment in most cases, with maximum imprisonment upto two years and power to courts to convert even those into fine

• Obtaining lower/ NIL tax deduction certificate to be automated for small taxpayers
• Depositories to accept Form 15G/ Form 15H from taxpayers
• TDS on sale of immovable property by a non-resident to be deducted and deposited through PAN of resident buyer instead of TAN
• TDS on manpower supply services to be limited at 1%/ 2%

Indirect Taxation Highlights

• Post Sale Discount: The requirement to link post-sale discounts to a prior agreement has been done away with through an amendment to Section 15(3) of the CGST Act, 2017, subject to the condition that the recipient reverses the applicable input tax credit and a credit note is issued accordingly.
• Credit Note: Now. If a post-supply discount is given as per Section 15(3)(b), the supplier can also issue a credit note for that discount as per section 34(1).
• Provisional Refund for IDS: The amendment provides for grant of provisional refund 90% of the refund amount claimed, with the balance payable after completion of final verification, subject to prescribed conditions.
• Refund in case of export: Now the taxpayers are also eligible to claim refund if the refund is less than one thousand rupees.
• National Appellate Authority: Temporary Appeal Mechanism under Section 101A(IA) of CGST Act until the National Appellate Authority is set up, the Government may notify an existing authority (including a tribunal) to hear Section 101B appeals, and references to the National Appellate Authority will apply to that authority.
• Place of Supply in case of "Intermediary Services": Deletion of clause (b) of Section 13(8) of the IGST Act which defines place of supply in case of "intermediary service", thereby meaning that POS for intermediary services will now be based on recipient's location aligning more clearly with Section 13(2) of IGST Act, 2017.

Key Changes in Customs Act:

• Extended Jurisdiction: Sub Section (2) of Section 1 of Customs Act, 1962 is being amended to extend the jurisdiction of the said Act beyond the territorial waters of India, for the purpose of fishing and fishing related activities.
• Advance Ruling: Sub-section (2) of section 28J is being amended so as to provide that advance ruling under sub-section (1) of that section shall remain valid for a period of five years or till there is a change in law or facts on the basis of which the advance ruling has been pronounced, whichever is earlier.
• Custom Bonded Warehouse: In the Customs Act, for section 67, the following section shall be substituted, namely: "67. The owner of any warehoused goods may remove them from one warehouse to another, subject to such conditions as may be prescribed."
• Insertion of Section 56A: Special provisions introduced for Indian-flagged fishing vessels operating beyond India's territorial waters. Fish harvested in International waters may be brought into India duty-free, while fish landed at foreign ports will be treated as exports. The government is empowered to frame rules for declaration, assessment, clearance, transit, and trans-shipment of such catch & a new definition of "Indian-flagged fishing vessel" is added in Section 2.

Key Amendments in Central Excise Act:

• 17 life-saving drugs exempted from Customs Duty. Customs duty on personal imports reduced from 20% to 10%.
• Exemptions have been provided for capital goods used for manufacturing Lithium-Ion Cells for batteries, import of sodium antimonate for use in manufacture of solar glass.
• The limit for duty-free imports of specified inputs used for processing seafood products for export, to increase from the current 1 per cent to 3 per cent of the FOB value.
• Concessional Duty in case of sale of certain products from SEZ to DTA.