Budget 2026: Government to provide tax holiday for foreign companies offering cloud services using India data centres

Finance Minister Nirmala Sitharaman on Sunday (February 1, 2026) proposed tax holiday till 2047 for foreign companies that provide cloud services to customers worldwide by using data centres in the country.

The tax holiday will be extended to the entities concerned subject to certain conditions.

In the Union Budget 2026-27 speech, Ms. Sitharaman said there is a need to enable critical infrastructure and boost investment in data centres.

“I propose to provide tax holiday till 2047 to any foreign company that provides cloud services to customers globally by using data centre services from India,” the Minister said.

To avail the tax holiday, companies need to provide services to Indian customers through an Indian reseller entity.

Among other proposals, the government will set up National Institute of Hospitality by upgrading existing National Council for Hotel Management and catering technology.

She also said a National Institute of Mental Health and Neurosciences (NIMHANS-2) will also be established, she said.

Further, Ms. Sitharaman said in Odisha, Karnataka, and Kerala, key turtle nesting sites, along with turtle trails, will be developed.

Another announcement is that the government has decided to extend deduction for cooperative members who supply cotton seeds and cattle feed.