In the 2026-27 annual budget to Parliament on 1st February 2026, the Indian government of Prime Minister Narendra Modi has announced a 21‑year tax holiday for artificial intelligence (AI) and data‑center projects set up in India. 

 

Not only is India stepping up in tune with the future, but the big announcement will lure cutting-edge technology, huge investments, and tremendous revenues. India is now gunning to become a top-notch global hub for AI infrastructure and private data centers. The scheme will support cloud‑computing services, AI training facilities, large‑scale digital infrastructure, and incubate AI startups in India.

 

Companies setting up AI‑related data‑center projects will be exempt from income tax for 21 years. The benefit will apply to projects that meet specified technical and investment thresholds, including minimum capital outlay and energy‑efficiency standards. The government said the incentive will cover both greenfield and expansion projects in designated regions.