The Union Budget 2026–27 has been hailed by Nasscom as India’s defining “tech moment,” with measures that provide policy certainty, AI growth incentives, and tax clarity. Key reforms include safe harbour expansion for IT services, semiconductor mission funding, and data centre tax holidays, positioning India as a global digital powerhouse.
The Union Budget 2026–27, presented by Finance Minister Nirmala Sitharaman, has drawn strong praise from Nasscom, which described it as a landmark moment for India’s technology sector. The apex IT industry body emphasized that the Budget provides predictability, competitiveness, and a clear roadmap for AI and digital infrastructure growth.
Among the most notable reforms is the consolidation of IT services categories—software development, IT-enabled services, KPO, and contract R&D—into a single classification with a uniform safe harbour margin of 15.5%. Additionally, the safe harbour eligibility threshold has been raised from ₹300 crore to ₹2,000 crore, offering greater tax certainty for cross-border IT service models.
The Budget also reinforced India’s semiconductor mission, nearly doubling allocations for electronics manufacturing, while extending tax holidays for data centres to attract long-term investment.
Major Takeaways
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Policy certainty: Safe harbour threshold raised to ₹2,000 crore with uniform margins.
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AI push: Budget prioritizes AI infrastructure and innovation ecosystems.
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Semiconductor mission: Funding nearly doubled to strengthen supply chains.
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Data centres: Extended tax holidays to boost cloud and digital services.
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Global competitiveness: Budget positions India as a hub for IT, AI, and semiconductors.
The Budget reflects India’s strategic vision of becoming a global technology leader, balancing ease of doing business with innovation-driven growth, and reinforcing the Viksit Bharat 2047 roadmap.
Sources: Economic Times, CXOtoday, Nasscom Official Release, Business Today