Union Budget 2026: Where the money comes from and goes | Infographics

Here, we examine the key sources of revenue and the allocation of funds in the Union Budget 2026.

Finance Minister Nirmala Sitharaman on Sunday (February 1, 2026) presented the Union government’s budget for FY2026.

Also read: Union Budget 2026 LIVE updates

Borrowings and other liabilities form the largest source of funds for this Budget, accounting for 24% of total inflows, unchanged from the previous year. Income tax is the second-largest contributor at 21% (down from 22% last year), followed by GST and other taxes at 15%, compared with 18% in 2025-26. Corporation tax also makes up a significant share at 18%. The remaining budgetary resources come from non-tax revenue, Union excise duties, customs duties, and non-debt capital receipts.

In the Budget, 22% of expenditure (unchanged from last year) is allocated to States’ share of taxes and duties, followed by interest payments at 20%. Central sector schemes account for 17% of total spending. Defence receives 11%, while Finance Commission and other transfers and centrally sponsored schemes get 8% and 7%, respectively. Pensions account for 2% of government expenditure, while the remaining 7% is spent on other items.