Telangana's tax devolution rises to Rs.29,899 crore in FY 2025-26, maintaining a 2.102% share in central taxes
Hyderabad: Tax devolution to Telangana has increased from Rs 27,050 crore in financial year (FY) 2024-25 to Rs 29,899 crore for the forthcoming year, according to the Union Budget presented in Parliament on Saturday. However, the share of Telangana in central tax devolution continues to remain the same at 2.102 per cent like in 2024-25.
The Union Budget has proposed a tax devolution of Rs 14,22,444.11 crore nationwide. Of this, Telangana's share accounted for 2.012 per cent, amounting to Rs 29,899.77 crore against Rs 27,050.25 crore last year.
Devolution in the form of corporation tax increased to Rs 8,349.04 crore (Rs 7,599.56 crore last year). Income-tax devolution was at 11,140.06 crore (Rs 9,691.71 crore), Central GST Rs 8,704.59 crore (Rs 7,821.99 crore), Customs Rs 1,376.22 crore (Rs 1,362.57 crore), Union excise duty Rs 285.91 crore (Rs 262.24 crore) while other taxes and duties remained static at Rs 43.09 crore. There is a slight dip in service tax devolution from Rs 87 lakh to Rs 86 lakh.
The 15th Finance Commission of India, under the chairmanship of N.K Singh had revised tax devolution and brought it down to 41 per cent from 42, till 2026.
The recommendations of the 16th Finance Commission, headed by Arvind Panagariya, will come into effect from 2026-27. The
Panagariya-headed commission had visited Telangana for consultations with the state government on September 10 last year. Chief Minister A. Revanth Reddy urged the commission to increase the share of states in central tax devolution to 50 per cent.
Revanth Reddy had stated that if the Centre increases the share of states to 50 per cent in tax devolution, it will help achieve Prime Minister Narendra Modi's vision to make India a $5 trillion economy.
Deputy Chief Minister and finance minister Mallu Bhatti Vikramarka, who was present in the meeting, urged the 16th Finance Commission to share the cess and surcharges collected by the Centre with the states. Bhatti said the cess and surcharges had increased over the years, leaving states with a smaller share of gross tax revenue.
