Why Budget 2026 Expectations Are Shifting: CXO Survey Signals Calm on Taxes, Markets Take Note
As the countdown to Budget 2026 begins, the usual pre-Budget buzz around tax changes appears unusually muted. Instead of lobbying for sweeping reforms or bracing for surprises, India’s top corporate leaders are signalling something far more rare in financial markets: a preference for continuity. A new pre-Budget survey by Moneycontrol and Deloitte reveals that more than 84% of CXOs do not expect any new personal income tax measures in the upcoming Budget — a signal that is already beginning to shape how investors and traders interpret the policy landscape ahead.
In a market environment where sentiment is often driven by speculation, this shift toward stability is being read as a quiet but important development.
Corporate leaders expect continuity rather than change in Budget 2026
According to the Deloitte CXO Survey, which gathered responses from 45 senior executives across sectors, 84.4% of respondents believe the government will not introduce any new personal income taxes in Budget 2026–28. This includes no new levies such as estate duty and no fresh interventions in the existing personal tax structure.
Only 15.6% of those surveyed expect the possibility of a new personal income tax measure. The overwhelming tilt toward “no change” suggests that corporate leadership is preparing for policy stability rather than disruption.
This is significant because expectations influence behaviour. When senior decision-makers in banking, manufacturing, technology, healthcare, logistics and energy anticipate continuity, they are more likely to plan investments, hiring and expansion without building in buffers for adverse tax surprises.
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What this signals about broader market expectations ahead of the Budget
Markets are sensitive not just to policy decisions, but to expectations around those decisions. Over the past few years, speculation around potential changes to tax slabs, surcharges and the reintroduction of legacy taxes has often added volatility ahead of the Budget.
This year’s survey indicates a different tone. The absence of strong expectations around new personal income taxes suggests that corporate India sees the government prioritising stability over experimentation.
For investors, this matters in two ways:
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It reduces the probability of sudden negative sentiment shocks linked to taxation headlines
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It supports the narrative of policy continuity, which tends to be viewed positively by long-term capital
One portfolio manager described it succinctly: “Markets fear uncertainty more than they fear bad news. Stability on taxes removes one major overhang.”
Estate duty speculation returns, but CXOs remain unconvinced
A recurring theme in Budget speculation is the possible return of estate duty — a tax that India abolished in 1985 but which continues to resurface in policy discussions and media narratives.
Estate duty is a tax levied on the total value of a person’s assets at the time of death, payable when property is transferred to legal heirs. Historically, India had estate duty rates as high as 85% before it was scrapped. Since then, there has been no estate tax in the country.
Despite occasional references in policy debates, the Deloitte survey suggests that corporate leaders are not factoring this into their expectations. Most respondents believe that reintroducing such a tax is unlikely in the current Budget cycle.
The survey notes that while an estate duty could theoretically add to government revenues, senior executives do not see it as a realistic near-term policy move.
Here’s what happened today and why traders reacted
What moved the market today
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The MC–Deloitte CXO Survey indicated strong expectations of no new personal income tax measures
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The data reinforced the narrative of policy stability ahead of Budget 2026
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Market participants began recalibrating expectations around pre-Budget volatility
Why traders reacted the way they did
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Short-term traders viewed the survey as reducing the risk of negative surprise headlines
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Positional traders saw lower probability of tax-driven sell-offs in consumption-linked stocks
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Budget-related option positioning reflected slightly reduced fear premiums
What signals investors are tracking now
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Whether policymakers echo the continuity narrative in upcoming speeches
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Whether any official commentary contradicts the CXO sentiment
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How analysts revise their Budget risk assumptions in light of the survey
The reaction has been subtle rather than dramatic — but in markets, the absence of fear can be just as powerful as the presence of optimism.
Why policy stability matters for investors more than headline tax cuts
Investors often focus on whether tax rates will be cut or increased. But experienced market participants know that stability itself carries value.
When there is clarity that no major changes are expected in personal taxation:
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Consumer sentiment tends to remain steadier
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High-income spending patterns are less likely to be disrupted
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Long-term financial planning by households faces fewer uncertainties
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Equity markets avoid knee-jerk reactions to policy shocks
This is particularly relevant for sectors linked to discretionary spending, financial services, real estate and consumer-facing businesses, where sudden tax policy changes can quickly alter behaviour.
Expert tone suggests the survey reflects realism, not optimism
The tone of the survey is not celebratory. It is pragmatic. It reflects the belief among senior executives that the government is unlikely to use the Budget as a tool for aggressive personal tax restructuring at this stage.
The survey, conducted jointly by Moneycontrol and Deloitte between December 2025 and January 2026, included CXOs from:
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Banking and insurance
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Manufacturing
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Transport and logistics
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Energy
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Life sciences and healthcare
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Telecom and technology
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E-commerce
The diversity of sectors adds credibility to the signal. It is not one industry hoping for relief; it is a broad leadership cohort aligning around the same expectation.
Impact on sentiment: A quieter but more confident pre-Budget environment
Pre-Budget periods are typically marked by nervous positioning, speculative chatter and sharp sector rotations. This year, sentiment appears more measured.
The CXO survey contributes to that tone by suggesting that large corporations are not bracing for disruptive tax announcements. That, in turn, influences how institutional investors, analysts and fund managers frame their near-term outlook.
As one market strategist put it, “When the smartest people in the room stop expecting surprises, the market stops paying for fear.”
What this means for investors and traders going forward
What impacted the market today?
The key development was the MC–Deloitte CXO Survey showing that 84.4% of corporate leaders expect no new personal income tax measures in Budget 2026.
What is the impact on investors?
For long-term investors, this reduces policy uncertainty and supports confidence in consumption-linked and domestic growth themes. It reinforces the idea that portfolios need not be defensively positioned purely due to Budget fear.
What is the impact on traders’ portfolios?
For traders, the survey dampens the probability of extreme pre-Budget volatility driven by tax speculation. That could influence option strategies, hedging behaviour and sectoral positioning.
What could happen in the coming days?
Attention will now shift to official signals from policymakers, Budget leaks, and commentary from government advisors. If these align with the continuity narrative, markets may gradually price in a lower-risk Budget outcome.
For now, the message from India’s boardrooms is clear: expectations are grounded, not anxious. And in a market that has grown accustomed to uncertainty, that itself is a development worth watching.
