Union Budget 2026: Smartphones get cheaper, cigarettes and alcohol to cost more

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While income tax slabs remain unchanged up to Rs 12 lakh per annum, several indirect taxes on everyday goods and services are set to change from April 1, 2026.

Smartphones to get cheaper in India

Sitharaman, while presenting her ninth consecutive budget, stated the government will offer support for electronics manufacturing, with increased funding of around Rs 40,000 crore. She also said that they plan to rationalise taxes on phone components to build India as a tech hub. This is likely to bring down the costs of smartphones, tablets, and mobile accessories in the long run.

Cigarettes and alcohol to get expensive

While the Union Budget 2026 mostly focused on healthcare, energy, electronics, and technology, tobacco and alcohol are set to get more expensive from April 1, 2026. The government has imposed new excise duties and higher taxes on cigarettes and other tobacco products, effective April 1, 2026. Cigarettes will attract higher excise duties in addition to the goods and services tax (GST), ultimately making them expensive.

While alcoholic beverages will continue to be taxed by state governments, the Central and state excise duty on liquor has been increased, which will make the effective selling price comparatively expensive from the upcoming financial year. 

Sports equipment to get cheaper

With Sitharaman announcing the extension of the ‘Khelo India Mission’ for 10 more years to boost sports infrastructure, sports equipment may become cheaper in the upcoming financial year. Reduced customs duties could make imported sports goods available at slightly lower prices.

Futures and options trading to be taxed heavily

Sitharaman, while speaking about share market trading, announced an increase in Security Transaction Tax (STT) on Futures and Options (F&O) transactions.

The Security Transaction Tax (STT) on futures will increase by 150 per cent, from 0.02 per cent to 0.05 per cent, while STT on options transactions will rise by 50 per cent, from 0.10 per cent to 0.15 per cent.

Expert opinion

Sahil Sonawat, (CFA, CA) who works as an analyst at a financial advisory firm Kroll emphasises, "The Union Budget 2026 presents a structural pivot, balancing an aggressive Rs 12.2 lakh crore capex (4.4 per cent of GDP) with a disciplined fiscal deficit glide path to 4.3 per cent."

Expressing his views on taxation hike on F&O trades and India's Semiconductor Mission 2.0, he added, "By scaling the India Semiconductor Mission 2.0 and hiking STT on F&O trades, the Finance Bill strategically prioritises long-term industrial 'Trump-proofing' over speculative retail volatility. For investors, this creates a high-quality 'risk-off' environment, trading short-term derivative liquidity for a more stable, infrastructure-led equity growth story."

Union Budget 2026: What gets cheaper, what gets costlier

Cheaper

• Cancer drugs
• TV equipment
• Leather goods
• Cameras
• Footwear
• Liquor scrap (empty bottles, expired products)
• Foreign education
• Overseas tour packages
• Imports of goods for nuclear power projects till 2035
• Video games’ manufacturing parts
• Energy transition equipment
• Microwave ovens  

Costlier

• Coffee and vending machines
• Income tax misreporting - Penalty equal to 100 per cent of the tax amount
• Non-disclosure of movable assets
• Stock options and futures trading
• Coal

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