Union Budget 2026 introduces tax structure changes impacting IPOs, securities trading, buybacks and MSMEs, with limited direct relief for taxpayers | GPlus
Some of the changes and modifications in the tax structure proposed by the Finance Minister are as mentioned below.
IPO activity and employment outlook
Over the next three to five years, there could be more IPOs with an emphasis on growth, increasing capacity and related activities, leading to enhanced employment opportunities.
Motor insurance tribunal awards
In the case of awards by tribunals relating to motor insurance issues, the amount received would be tax exempt. Further, TDS on such awards would be done away with.
Form 15H and Form 15G submission
Currently, investors are required to file Form 15H or Form 15G with individual companies or their RTAs (Registrars and Transfer Agents). This would be replaced by a system where investors can submit the forms to depositories, which will then share them with the concerned companies.
Changes in securities transaction tax
The Securities Transaction Tax (STT) for futures has been increased from 0.02 per cent to 0.05 per cent. Similarly, the STT for options has been increased from 0.1 per cent or 0.125 per cent to 0.15 per cent.
Medical tourism impact
The Indian medical industry is on the threshold of increased adoption, with emphasis on excellent medical facilities and the expertise of doctors making India a haven for medical assistance. This could, however, end up making the cost of medical care for resident individuals more expensive.
Buyback taxation
Buybacks will be treated as capital for all investors except promoters. In the case of corporate promoters, the tax would be about 22 per cent, while for individual promoters it would be about 30 per cent. This is likely to reduce the possibility of dampening buyback activity.
MSME push and IPO pipeline
The government’s renewed emphasis on pushing and encouraging the MSME segment, with the aim of increasing capacity and setting up new manufacturing facilities, would require many companies to issue shares to the general public through IPOs to raise funds. This is likely to result in an increase over the next two to three years, making available a gamut of companies for investment.
The common man will therefore have a significant opportunity to participate in the shareholding of companies and earn handsome profits in some of the better-run enterprises.
Infrastructure and manufacturing focus
Many of the changes mentioned above are initiated against the backdrop of infrastructure development and a renewed emphasis on the manufacturing sector, with exemptions proposed for imports, tax breaks and related incentives. This will probably give a fillip to the common man in terms of increased employment opportunities in certain industries and job functions.
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Overall assessment
All in all, the Budget has been lukewarm for the common man, with a few takeaways, but has proved to be a dampener as far as expectations of reduced taxes or increased exemptions are concerned.
The writer is Ramkumar K., retired Chief of Business Development and Operations of Central Depository Services (India) Ltd. (CDSL).
