Union Budget 2026 Expectations: How Tax, Inflation & Fiscal Signals Could Impact Gold, Silver & Stocks?

Corporate tax, GST, individual tax, and equity related specifically. Industry needs support through corporate tax relief, especially due to global tariffs and trade disruptions. Certain sectors, like textiles, are already under significant pressure and need policy support. Although GST has been rationalised, gold and silver prices have risen sharply. Investors and traders would benefit if the government provided some relaxation in import duties on bullion.

Individual Tax adheres to two key points:

• As per Nitin Shahi, Executive Director, Findoc, the current tax-free income limit of Rs 12 lakh (introduced last year) should be increased to Rs 15 lakh. This would boost consumer spending, which would eventually increase GST collections.
• Nitin Shahi further added that the gradual phase-out of the old income tax regime is a concern. Earlier, tax-saving provisions (like mandatory investments up to Rs 1.5 lakh) encouraged forced savings. In a country with weak social security systems, such forced investments helped ensure long-term financial protection, including insurance and retirement savings.

On capital markets & exchange-related taxes earlier, when Securities Transaction Tax (STT) was introduced, Long-Term Capital Gains (LTCG) tax was removed, Short-Term Capital Gains (STCG) tax was only 10%, and dividends and bonuses were tax-free. Currently LTCG is taxed at 12.5%, STCG is taxed at 20% and dividends and bonuses are also taxed.

"Since STT is no longer treated as an advance tax, the overall cost of trading has increased. Either STT should again be treated as an advance tax, or the overall tax structure should be rationalised to reduce trading costs for investors and traders," added Nitin Shahi.

If inflation rises, investors tend to move toward safe-haven assets such as gold and silver. Higher inflation usually leads to higher interest rates, making future fixed deposits more attractive. However, at present, inflation is under control and not a major concern. Global geopolitical tensions increase risk aversion, pushing investors toward gold and silver. This trend is already visible in rising bullion prices.

The government's focus has shifted from fiscal deficit to debt-to-GDP ratios, which could support long-term growth. Increased government and corporate capital expenditure (CAPEX) helps drive economic growth. However, excessive government borrowing could push bond yields higher, negatively impacting equity markets and investor confidence.

The rupee value is closely linked to inflation and bullion prices. Since gold and silver are priced in dollars, rupee depreciation leads to higher domestic bullion prices. The rupee should remain within a stable range to avoid artificial inflation in gold and silver prices.

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