Income Tax: With less than a month remaining until the Union Budget is unveiled, taxpayers are eagerly anticipating significant relief. Salary-based employees and retired senior citizens have their hopes set on the government’s adjustments to income tax slabs. The Modi Government 3.0 is poised to deliver a substantial gift, especially to the middle-class through various income tax reforms expected in the upcoming Budget.
Taxpayers Expect Key Reforms
As Union Finance Minister Nirmala Sitharaman prepares to present the Union Budget 2026 in February, preparations are nearing completion. Taxpayers are particularly looking forward to much-needed reforms. Salary-based individuals and senior citizens are optimistic about receiving relief in income tax regulations. Anticipated announcements include significant changes to ITR slabs and overall tax reforms.
Expectation of Changes in Income Tax Slabs
Currently, India operates under two tax regimes—the old and the new tax regime. The Finance Minister may consider making the new tax regime more appealing by revising the income tax slab rates. Tax experts suggest lowering the tax rate to 30% for incomes surpassing ₹20 lakh, which could motivate taxpayers to choose the new tax regime.
Special Tax Relief for Senior Citizens
The new tax regime uniformly applies to all taxpayers; however, there is advocacy for separate tax slabs for citizens aged 60 and above. Experts propose introducing lower tax rates on higher income to provide relief specifically for senior citizens.
Proposal to Increase Standard Deduction to ₹1 Lakh
Additionally, a noteworthy relief measure is proposed for salaried employees. Experts advocate for an increase in the standard deduction to ₹1 lakh. Currently, the standard deduction stands at ₹50,000 under the old tax regime and ₹75,000 under the new tax regime. Raising it to ₹1 lakh would deliver significant financial relief.
Possible Change in Gold Import Duty
There are speculations that the upcoming budget could introduce changes in gold import duty. To address the trade deficit, the government may adjust the import duty on gold, which was recently lowered from 15% to 6%. Increasing this duty again may be a strategy to mitigate the trade deficit.
Possibility of Changes in Section 80C
Furthermore, there is a proposal to revise the Section 80C deduction limit in this budget. This limit could potentially rise from ₹1.5 lakh to ₹3.5 lakh. Additionally, there are calls to separate home loan interest deductions from Section 80C and allow a higher deduction limit. Such major changes are being considered for Budget 2026.
In conclusion, the upcoming Union Budget has the potential to significantly impact the salaried class and senior citizens positively. With various reforms like changes in income tax slabs and increased standard deductions on the horizon, taxpayers can look forward to substantial financial relief.
Frequently Asked Questions
What are the expected income tax changes in Budget 2026?
Budget 2026 is anticipated to include changes in income tax slabs, special relief for senior citizens, and an increase in the standard deduction.
Will the standard deduction increase in 2026?
There is a proposal to raise the standard deduction from ₹50,000 to ₹1 lakh for the old tax regime and from ₹75,000 under the new regime.
Are there special provisions for senior citizens regarding taxes?
Yes, tax experts recommend separate tax slabs for citizens aged 60 and above, with lower rates on higher income to provide specific relief.
What changes are being proposed for Section 80C deductions?
There is a push to raise the Section 80C deduction limit from ₹1.5 lakh to ₹3.5 lakh and to separate home loan interest deductions to allow for a higher limit.
Will there be changes to gold import duty in the upcoming budget?
Yes, the government may consider altering gold import duty, potentially increasing it again to help manage the trade deficit, after recently reducing it.
