Union Budget 2026: TCS, Infosys, other IT shares sole gainers amid market crash today; here's why 

Union Budget 2026: Shares of information technology firms such as TCS, Infosys, Allied Digital Services, Onward Technologies, Orient Technologies and Infobeans Technologies Ltd among others bucked the negative market trend on Sunday after Union Budget 2026.  Shares of TCS and Infosys were the top Sensex gainers today even as the 30-stock index tanked 1,547 pts to 80,722. The 50-stock Nifty tanked 495.20 pts to 24,825.  

TCS stock closed 1.92% higher at Rs 3185.15 and Infosys shares ended 1.17% higher at Rs 1659.65 after FM Nirmala Sitharaman proposed to provide a safe harbour of 15.5% to the resident entity providing data centre services to a related foreign company (who is providing cloud services to any part of the world outside India).  

The FM further announced the raising of limit for availing safe harbour for IT services from Rs 300 crore to Rs 2,000 crore. This proved to be a sentiment booster for IT stocks. 

Safe harbour for IT firms means legal or tax protections that shield IT companies, intermediaries, and service providers from liability or, in taxation, from extensive audit scrutiny, provided they comply with specific, predefined conditions.

"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. It will, however, need to provide services to Indian customers through an Indian reseller entity," the FM said.      

Decoding the move, Meyyappan Nagappan, Partner- Tax Practice, Trilegal said, "The Budget reinforces India’s attractiveness as a hub for global capability centres and IT services. Global Capability Centers (GCCs) in India have been moving away increasing from a cost effectiveness play to a more strategic role; the proposed uniform safe harbour margin of 15.5% across a spectrum of IT services, with the threshold increased from Rs 300 crore to Rs 2,000 crore, is likely to further incentivise the shifting of higher value-added tech functions to GCCs in India, as they may likely be within the safe harbour range. While creating an integrated IT/ITeS bucket helps resolve pain points in clearly categorising various GCC activities within the current safe harbour categories, there may still be certain high value strategic and ESG activities, which fall outside the IT/ITeS category, the treatment for which remains to be seen.  

A GCC in India is a foreign company’s wholly owned, internal centre that handles strategic functions such as IT, R&D, engineering and back-office operations. According to market data, India hosts over 50% of the world's GCCs, making it the global hub for these entities.

Vinish Bawa, Leader - Telecom, PwC India said,"Union Budget 2026 positions India as a global data capital centre. 
 
1. A landmark tax holiday until 2047 has been announced for foreign companies providing global cloud services from Indian data centres.   

2. To simplify compliance, a 15.5% safe harbour on costs has been established for related-party data centre services. 

3. The Budget allocates Rs 40,000 crore for Industrial Scientific and Medical (ISM) 2.0 to bolster the semiconductor and AI hardware ecosystem. 
 
These measures aim to bridge the capacity gap and accelerate capital-intensive investments in scalable digital infrastructure. Their net impact is faster capacity addition, stronger global capital inflows, and sharper positioning for India as a scalable, cost-competitive data centre hub."

Meanwhile, BSE IT index ended 243 pts higher at 36,858 and Nifty IT index added 217 pts to 38,252. 

Shares of Allied Digital Services (14.97%), Onward Technologies (7.16%), Orient Technologies (6.38%) and Infobeans Technologies (6%), Aurionpro Solutions (5.57%) and Netweb Technologies (5.10%)  were the top gainers on the BSE IT Index.