Income Tax: The anticipation surrounding the upcoming Union Budget is at an all-time high, with only a month left until its presentation. Salary-based employees and retired senior citizen pensioners are eagerly expecting significant income tax relief from the government, particularly under the Modi Government 3.0. Major announcements are anticipated, aimed at easing the tax burden on the middle class in the upcoming budget slated for February 2026.
Taxpayers Expect Key Reforms
As Union Finance Minister Nirmala Sitharaman prepares to unveil the Union Budget 2026, the stage is set for transformative changes. Taxpayers, especially those earning salaries and senior citizens, are hopeful for essential reforms that will reshape income tax regulations. Many key announcements, including alterations to income tax return (ITR) slabs and overall tax reforms, are expected to feature prominently in the budget discussion.
Expectation of Changes in Income Tax Slabs
India currently operates under two tax regimes, the old and the new. There is strong speculation that the Finance Minister may revise tax rates to enhance the attractiveness of the new tax regime. Experts propose reducing the tax rate to a flat 30% for incomes above ₹20 lakh, incentivizing more taxpayers to transition to this more favorable system.
Special Tax Relief for Senior Citizens
The existing new tax regime applies uniformly across all taxpayers. However, tax experts have suggested implementing distinct tax slabs specifically for citizens aged 60 and above. This proposal may introduce lower tax rates on higher income thresholds to alleviate the financial burden on senior citizens.
Proposal to Increase Standard Deduction to ₹1 Lakh
Another significant relief on the table for salary-based employees is the proposed increase of 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 regime, making this proposed increase a substantial financial advantage for taxpayers.
Possible Change in Gold Import Duty
In addition to income tax changes, the upcoming budget may address gold import duties. The government is considering raising the import duty on gold, which was recently reduced from 15% to 6%. This potential adjustment aims to mitigate the trade deficit by imposing stricter controls on gold imports.
Possibility of Changes in Section 80C
There is a noteworthy proposal on the table to amend the Section 80C deduction limit. This limit might be raised from ₹1.5 lakh to ₹3.5 lakh. Furthermore, experts advocate for separating the home loan interest deduction from Section 80C, allowing for a higher deduction limit to benefit homeowners. These significant reforms are under consideration for Budget 2026.
In conclusion, the upcoming Union Budget holds significant promise for salaried individuals and senior citizens. With expectations surrounding income tax reforms running high, these proposed changes could create impactful relief for taxpayers across India. As the presentation of the budget approaches, the anticipation builds for what could be a pivotal moment in the financial landscape.
Frequently Asked Questions
What are the expected changes in income tax for salaried individuals in the upcoming budget?
Taxpayers are looking forward to potential reforms in income tax slabs, including a proposed reduction in the tax rate for higher incomes, aimed at providing more relief.
Will senior citizens receive special tax benefits in the new budget?
Yes, there are proposals for separate tax slabs for citizens aged 60 and above, intending to offer lower tax rates on higher incomes to reduce their financial burden.
What is the proposed increase in the standard deduction?
Experts recommend raising the standard deduction for salaried employees to ₹1 lakh, significantly increasing relief compared to the current limits.
Are there any changes anticipated regarding gold import duties?
The government may consider increasing gold import duties to help address the trade deficit, following a recent reduction in these rates.
What revisions are suggested for Section 80C deductions?
There is a proposal to increase the deduction limit under Section 80C from ₹1.5 lakh to ₹3.5 lakh, alongside separating home loan interest deductions for higher benefits.
