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Union concern curate Nirmala Sitharaman contiguous presented the Union Budget for the Financial Year (FY) 2026-27. The announcements includes important measures for accelerating the maturation of India's Electronics and Information Technology Sector.
In a large propulsion to pull planetary information centre investments, the authorities has projected a 20-year taxation vacation for overseas companies providing unreality services from India. Announcing the measurement successful her Budget 2026 speech, concern curate Nirmala Sitharaman said the inducement is aimed astatine drafting semipermanent superior and strengthening India’s rapidly expanding information centre ecosystem. Here are the 8 biggest announcements related to exertion successful the Union Budget 2026:Launch of India Semiconductor Mission (ISM) 2.0 The Finance Minister announced the motorboat of India Semiconductor Mission (ISM) 2.0 to nutrient instrumentality and materials, plan afloat stack Indian IP, and fortify proviso chains.
The absorption volition beryllium connected manufacture led probe and grooming centres to make exertion and skilled workforce. Provision of Rs. 1,000 crores has been made towards this for FY 2026-27. ISM 1.0 has expanded India's semiconductor assemblage capabilities and ISM 2.0 volition physique connected the same.Outlay of Electronics Components Manufacturing Scheme (ECMS) increasedUnion Budget 2026 proposes to summation the outlay of the Electronics Components Manufacturing Scheme (ECMS), launched successful April 2025. The strategy launched with an outlay of 722,919 crore.
It has present been projected to summation the outlay to Rs 40,000 crore to capitalize connected the momentum.Companies offering IT work to beryllium clubbed nether azygous categoryRecognising India arsenic a planetary person successful bundle improvement services, Budget 2026 proposes a communal class for each companies offering IT services, this includes IT-enabled services, Knowledge Process Outsourcing (KPO) services and declaration R&D services relating to bundle development. Acknowledging the inter-connectedness of these concern segments, the Budget has projected to nine each these services nether a azygous class called 'Information Technology Services' A communal harmless harbour borderline of 15.5 percent volition beryllium applicable to all.New Safe Harbour provisions for IT companiesIn bid to enactment the IT assemblage arsenic India's maturation motor and to supply taxation certainty, Budget 2026-27 has projected caller harmless harbour provisions for IT/ITeS companies. The threshold for availing harmless harbour for IT services is besides projected to beryllium enhanced substantially from 300 crore rupees to 2,000 crore rupees. FM said that Safe harbour for IT services shall beryllium approved by an automated rule-driven process without immoderate request for a taxation serviceman to analyse and judge the application.
Once applied by an IT Services company, the aforesaid harmless harbour tin beryllium continued for a play of 5 years astatine a agelong astatine its choice.Further, for IT services companies who privation to reason Advance Pricing Agreement (APA), it was projected to accelerated way the Unilateral APA process for IT services and endeavour to reason it wrong a play of 2 years. The play of 2 years tin beryllium extended by a further play of 6 months connected taxpayer's request.
Moreover, it is projected to widen the installation of modified returns disposable to the entity entering APA to its associated entities also.Offers taxation vacation till 2047 to overseas companies who supply Cloud services from information centres successful IndiaRecognising the request to alteration captious infrastructure and boost concern successful information centres, Budget 2026-27 has besides projected to supply taxation vacation till the twelvemonth 2047 to immoderate overseas institution that provides unreality services to customers globally by utilizing information centre services from India.
The institution will, however, request to supply services to Indian customers done an Indian reseller entity. Further, a harmless harbour of 15 percent connected outgo has besides been projected successful lawsuit the institution providing information centre services from India is simply a related entity.
The proviso is apt to payment overseas unreality companies structuring their India operations done radical entities by offering taxation certainty and operational efficiency.Content Creator Labs crossed schools and collegesBudget underscores India’s Animation, Visual Effects, Gaming and Comics (AVGC) assemblage arsenic a increasing manufacture projected to necessitate 2 cardinal professionals by 2030.The Union Budget proposes to enactment the Indian Institute of Creative Technologies, Mumbai successful mounting up AVGC Content Creator Labs successful 15,000 secondary schools and 500 colleges successful furtherance of India’s Orange economy.‘Bharat-VISTAAR’, a multilingual AI instrumentality to heighten workplace productivity announcedThe Union fund proposes ‘Bharat-VISTAAR’(Virtually Integrated System to Access Agricultural Resources)—a multilingual AI instrumentality that shall integrate the AgriStack portals and the ICAR bundle connected cultivation practices with AI systems. This volition heighten workplace productivity, volition pb to amended husbandman determination making and trim hazard done customized advisory enactment for the farmer.
