Income Tax Expectations Rise As Budget 2026 Nears After Major Relief In Last Year’s Budget

New Delhi: Just a few days before the Union Budget 2026, taxpayers across the country are once again hoping for relief. Last year, in Budget 2025, the government had taken such major decisions regarding income tax, which directly benefited the middle class and salaried people. Changes in tax slabs, increasing the exemption limit and simplifying the law—all this had reduced the pressure on the common taxpayer's pocket. Now the question is whether the government will proceed on the same path in Budget 2026 or the focus will be on strengthening the previous announcements.

What was the biggest relief given to taxpayers in Budget 2025?

The biggest announcement of Budget 2025 was made regarding income tax exemption. The government had made income up to Rs 12 lakh tax free. After adding standard deduction for the salaried category, this limit reached Rs 12.75 lakh. Lakhs of taxpayers directly benefited from this decision.

How did the new tax slabs change the tax structure?

The government had refixed the slabs under the new tax regime. There was no tax on income up to Rs 4 lakh. The tax burden was balanced by gradually increasing slabs. Its objective was to make the tax system simple and understandable.

Why was there a need to bring a new Income Tax Act?

The government had decided to remove old complex sections. The new Income Tax Act 2025 was passed by the Parliament. In this law, the language was simplified and unnecessary provisions were removed. The objective was to reduce tax disputes and ease compliance.

Who benefited from the change in TDS rules?

Many rules related to TDS were changed in Budget 2025. The limit of TDS on rent was increased from Rs 2.4 lakh to Rs 6 lakh. This brought relief to small landlords. The exemption limit on interest income for senior citizens was also doubled.

What was the impact of the extension of the ITR(U) deadline?

The government had extended the period for filing updated returns. Now the facility to update ITR has been given for four years. This gave taxpayers more time to correct their mistakes. The pressure of fear and fine was less than before.

What are taxpayers' expectations from Budget 2026?

Many people are expecting further relief in tax slabs. There is a growing demand to take into account inflation and cost of living. The middle class wants the government to focus on increasing disposable income.

Is a tax cut possible again in Budget 2026?

Tax experts believe that there is little scope for major changes. The impact of last year's cuts is still visible on revenue. The government can adopt a cautious approach.

What can the government focus on?

There may be emphasis on implementing the new Income Tax Act. There may be an effort to make the tax system stable and transparent.  Tax-related clarity can be increased for foreign investors.

Will Budget 2026 live up to expectations?

There is little hope for a big announcement. But small improvements and technical changes are possible. Now everyone's eyes are fixed on February 1, when the picture will be completely clear.