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Budget 2026-27 Targets 8% Tax Revenue Growth, Projects Rs 44 Lakh Crore

The Union Budget for 2026-27 estimates Gross Tax Revenue at Rs 44.04 lakh crore, marking an 8% growth over the revised estimates for the previous year. Direct taxes, including corporate and personal income tax, are the major contributors, constituting 61.2% of the total. The budget allocates Rs 12.22 lakh crore for capital expenditure, aiming to enhance the economy's productive capacity. Furthermore, the Sixteenth Finance Commission has recommended maintaining the states' share of the divisible tax pool at 41%.

Key Points: Budget 2026-27: Tax Revenue Estimated at Rs 44.04 Lakh Crore

  • Rs 44.04 lakh crore gross tax revenue
  • Direct taxes major contributor at 61.2%
  • Capital expenditure of Rs 12.22 lakh crore
  • 41% state devolution share retained
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Budget projects 8 pc rise in tax revenue at Rs 44.04 lakh crore

Union Budget projects 8% rise in gross tax revenue to Rs 44.04 lakh crore, with direct taxes contributing 61.2%. Key fiscal targets outlined.

"The Union Budget for 2026-27... estimates the Gross Tax Revenue at Rs 44.04 lakh crore, which represents a growth of 8.0 per cent - Finance Ministry"

New Delhi, Feb 1

The Union Budget for 2026-27 tabled by Finance Minister Nirmala Sitharaman in Parliament on Sunday estimates the Gross Tax Revenue at Rs 44.04 lakh crore, which represents a growth of 8.0 per cent over the revised estimate 2025-26.

Direct Taxes, which include corporate tax and personal income tax, estimated at Rs 26.97 lakh crore, are the major contributors, constituting as much as 61.2 per cent of total gross tax revenue. Indirect taxes are estimated at Rs 17.07 lakh crore.

In the Budget Estimate (BE) 2026-27, the GTR to GDP ratio is estimated at 11.2 per cent. The Budget 2026-27 is also the first year of the award period of the Sixteenth Finance Commission (SFC). SFC has recommended retaining the share of devolution to the States at 41 per cent of the divisible pool.

The Tax Revenues (Net to Centre) are projected to be Rs 28.67 lakh crore. In BE 2026-27, the Non-Tax Revenues (NTR) of the Central Government are projected at Rs 6.66 lakh crore. Revenue Receipts of the Union Government [comprising Tax Revenues (Net to Centre) and Non- Tax Revenues (NTR)], are estimated at Rs 35.33 lakh crore. Revenue Receipt estimates assume a growth of 5.7 per cent over RE 2025-26.

The total expenditure of the Central Government in BE 2026-27 is projected to be Rs 53.47 lakh crore (13.6 per cent of GDP), showing a growth of 7.7 per cent over RE 2025-26 of Rs 49.65 lakh crore. The Budget for FY 2026-27 projects Rs 12.22 lakh crore (3.1 per cent of GDP) towards capital expenditure. This includes capital support to States through Special Assistance as Loan to States for Capital Investment (SASCI) with an outlay of Rs 2.0 lakh crore.

Effective capital expenditure of the Union Government includes the Union Government's capital expenditure and grants-in-aid for the creation of capital assets.

Together, they constitute investments that enhance and upgrade the productive capacity of the economy.

In BE 2026-27, the allocation under grants-in-aid for the creation of capital assets is projected at Rs 4.93 lakh crore (or 1.3 per cent of GDP). Thus, the effective capital expenditure in FY 2026-27 is estimated at Rs 17.15 lakh crore (or 4.4 per cent of GDP).

- IANS

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Reader Comments

S
Shreya B
Direct taxes contributing over 61% is huge! It shows the burden on individuals and corporates. While infrastructure spending is necessary, I sincerely hope the government ensures efficient use of these massive funds. We've seen cost overruns and delays in projects before. Transparency in how this ₹17.15 lakh crore effective capex is spent is crucial.
A
Aman W
Good to see the Finance Commission retaining the 41% devolution to states. This is vital for balanced regional development. States like ours need these funds for health, education, and rural infrastructure. The ₹2 lakh crore loan for state capital investment is a welcome step. Hope it reaches the ground level effectively.
P
Priyanka N
The numbers are impressive on paper, but what about the common person's pocket? Petrol, diesel, and everyday goods are still expensive due to indirect taxes. While direct tax gets the spotlight, the indirect tax burden on the average household needs relief. A little less focus on big numbers and more on easing the cost of living would be appreciated.
K
Karthik V
As a small business owner, I'm cautiously optimistic. The projected growth in revenue suggests confidence in economic activity. The continued capex push should create demand. My humble request to the FM: please look at easing compliance for MSMEs further. Sometimes the complexity of tax rules is a bigger challenge than the tax itself.
M
Michael C
Watching from abroad, this budget seems to continue a prudent fiscal path for India. Maintaining a high level of capital expenditure (4.4% of GDP effective capex) is key for future competitiveness. The challenge will be execution and avoiding

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