Budget 2026: What do taxpayers want from the Finance Minister's budget? Here are 5 major expectations...
Union Budget 2026 Expectations: As Budget 2026-27 approaches, the expectations of taxpayers across the country are rising again. In every budget, the Finance Minister's tax announcements are a key focus. Income tax announcements are particularly important for the salaried and middle classes. This is why taxpayers' expectations for Budget 2026 have risen significantly this time. In the previous budget (2025), the government made the new tax regime quite attractive, but for 2026, the middle-class and salaried employees are hoping for more significant relief.
This budget, to be presented on February 1, 2026, will be the third full budget of the Modi government 3.0. Union Budget 2026-27 is also special because it will be the last full budget before the new income tax law comes into effect. The government is going to implement the new Income Tax Act 2025, replacing the nearly 60-year-old tax law, from April 1, 2026. As such, this budget could set the direction for the future tax system.
Taxpayers Expect Relief from the Government
The government has already begun preparing for Budget 2026. The Finance Ministry has sought suggestions from trade and industry regarding changes to direct and indirect taxes. The focus is on simplifying tax rates and streamlining regulations. Meanwhile, millions of taxpayers are also hoping for relief from the government.
Announcement of Income Tax Free Up to ₹12 Lakh in Budget 2025
The last two budgets have been significant in terms of taxation. In particular, Budget 2025 made income up to ₹12 lakh tax-free under the new tax system. This was considered the biggest relief for taxpayers in several years. Additionally, the basic exemption limit was also increased to ₹4 lakh in the new system.
However, this relief was limited to the new tax system. Neither were the tax slabs changed in the old tax system, nor were the limits for deductions like 80C or 80D increased. This is why there is a strong demand for relief in the old tax system from Budget 2026.
What do taxpayers want from the Finance Minister's kitty?
Here, we will tell you about the five most important income tax changes for Budget 2026-27 that taxpayers are eagerly awaiting:
Taxpayers under the old tax regime want the basic exemption limit, currently at ₹2.5 lakh, to be increased. Additionally, tax slabs should also be changed to provide relief comparable to the new system. There is also a strong demand to increase the 80C limit from Rs 1.5 lakh to Rs 2 lakh to make savings, insurance, and children's education expenses easier. Even today, a large number of employed people choose the old system because it offers deductions such as PF, home loans, children's fees, and insurance. Taxpayers hope the government will either improve the old system or merge the two systems to create a simpler and clearer tax structure.
People are also expecting simplification of regulations with the new tax law. For a long time, there have been difficulties in filing tax returns, receiving refunds, and matching TDS. The new law will replace the assessment year with the tax year and reduce the number of rules. It is expected that in Budget 2026, the government may take major steps to further expedite refunds and simplify filing. In this era of inflation, housing and medical expenses have risen rapidly.
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