Top Budget 2026 Announcements for the Stock Market
The Union Budget 2026 presented by Finance Minister Nirmala Sitharaman was a mixed bag for the stock market. While it had great news for long-term investors and specific sectors like technology and infrastructure it brought a shock for short-term traders and those who trade in Futures and Options (F&O).On the day of the Budget the stock market was very jumpy. The Sensex and Nifty started high but ended with a sharp drop because of one particular tax announcement.
Here is everything you need to know about how the Budget 2026 affects your stocks and investments.
Budget 2026 Announcements for the Stock Market
The Big F&O Shock: Higher STT
The biggest headline for the market was the hike in Securities Transaction Tax (STT). STT is a tax you pay every time you buy or sell a security on the exchange.
- What Changed? Futures: STT raised from 0.02% to 0.05%. Options: STT on the premium raised from 0.1% to 0.15%.
- The Impact: This makes trading much more expensive for day traders and those who use high-frequency trading algorithms. The government's goal is to discourage purely speculative trading which they say has become too large compared to India's actual economy.
Good News for Buybacks (The IT Sector Win)
If you own shares in big IT companies like TCS, Infosys or Wipro this is important.
- The Change: Share buybacks will now be taxed as Capital Gains for shareholders.
- Why it matters: Previously buybacks were taxed as Dividends which meant some people were paying up to 35% tax. Now it will be taxed at the Capital Gains rate (12.5% for long-term).
- The Result: This makes buybacks tax-efficient again and you can expect more companies to announce buybacks to give cash back to their shareholders.
Opening Doors for Global Indians (NRI/PROI)
The government wants more patient money from abroad, not just hot money that leaves the market quickly.
- Direct Access: Individuals living outside India (PROIs) can now buy Indian stocks directly through the Portfolio Investment Scheme.
- Higher Limits: The limit for an individual was doubled from 5% to 10%. The total limit for all such investors in a company was raised from 10% to 24%.
- The Result: This will bring in more stable long-term money from the Indian diaspora across the globe helping the market stay steady.
Sector Winners: Where the Money is Flowing
The Budget earmarked huge sums of money for specific areas. Stocks in these sectors are likely to be market darlings in 2026:
- Semiconductors (ISM 2.0): Huge support for manufacturing chips and electronic components.
- Biopharma (Biopharma SHAKTI): A ₹10000 crore fund to make India a global hub for medicine and research.
- Infrastructure: A record ₹12.2 lakh crore will be spent on roads, railways and bridges. This is great for cement, steel and construction stocks.
- Digital/AI: Support for Data Centres and AI Missions will help the New Age tech stocks.
Capital Gains Tax: The Silent Relief
Going into the Budget many investors were scared that the government would increase the Long-Term Capital Gains (LTCG) tax.
- The Outcome: The government did not change the Capital Gains tax rates. This was a huge sigh of relief for the market. Keeping the tax stable gives investors confidence to stay invested for the long term.
Sector Impact Summary
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