As Budget 2026-27 approaches, the expectations of taxpayers across the country are rising once again. In every budget, people’s attention is mainly on the tax announcements of the Finance Minister. For salaried employees and the middle class, income tax declarations are very important. This is the reason why this time the expectations of taxpayers from Budget 2026 have increased even more. In the last budget (2025), the government had made the new tax system quite attractive, but for 2026, the middle class and salaried employees are expecting even bigger relief.
This budget, which will be presented on February 1, 2026, will be the third full budget of the Modi 3.0 government. The Union Budget 2026-27 is also special because it will be the last full budget before the implementation of the new income tax law. The government is going to implement the new Income Tax Act 2025 from April 1, 2026, which will replace the old tax law that is almost 60 years old. Therefore, this budget can decide the direction of the upcoming tax system.
Taxpayers expect relief from the government
The government has started preparations for Budget 2026. The Finance Ministry has sought suggestions from trade and industry regarding changes in direct and indirect taxes. The focus is on simplifying tax rates and streamlining rules. On the other hand, lakhs of taxpayers are also expecting relief from the government.
Income tax-free up to Rs 12 lakh announced in Budget 2025
The last two budgets have been very important in terms of taxation. Notably, under the new tax system in Budget 2025, income up to Rs 12 lakh was made tax-free. This was considered the biggest relief given to taxpayers in many years. Along with this, the basic exemption limit in the new system was also increased to Rs 4 lakh. However, this relief was limited to the new tax system only. In the old tax system, neither the tax slabs were changed nor the limits of deductions like 80C or 80D were increased. This is why there is a strong demand for relief in the old tax system in Budget 2026.
What do taxpayers want from the Finance Minister? Here, we are going to tell you about the 5 most important income tax changes for Budget 2026-27, which taxpayers are eagerly waiting for:
Under the old tax system, taxpayers want the basic exemption limit, which is currently Rs 2.5 lakh, to be increased. They also want changes in the tax slab so that relief can be provided at par with the new system. There is also a strong demand to increase the limit of 80C from Rs 1.5 lakh to Rs 2 lakh to make savings, insurance and children’s education expenses a little easier. Even today, a large number of salaried people choose the old system because it offers deductions on PF, home loan, children’s fees and insurance. Taxpayers expect the government to either reform the old system or create a simpler and cleaner tax structure by merging both the systems.
People are also expecting simplification of rules with the new tax law. For a long time, there are problems in filing tax returns, getting refunds and TDS matching. The new law will replace assessment year with tax year and will also reduce the number of rules. It is expected that in Budget 2026, the government can take important steps for faster refunds and easier filing. In this era of inflation, household and medical expenses have increased rapidly. Taxpayers want that some important expenses should also be exempted in the new tax system. There is also a growing demand to increase the limit of home loan interest and medical insurance deduction in the old system. Senior citizens expect more rebates and easier rules on interest earned on savings. People also want simpler rules regarding capital gains tax. Right now, there are different rules for different assets, which leads to confusion. Taxpayers want a uniform and simple system for shares, mutual funds and property. There is also a need for clear rules regarding digital assets like cryptocurrency and foreign income. Clear guidelines on these matters are expected under the new tax law.
This time, taxpayers are not just demanding lower taxes; They want a tax system that is simple, easy to understand and trustworthy. Middle class and salary earning people have high expectations from Budget 2026. This budget is very important for the common people before the new tax laws are implemented.
