Budget 2026: Would India’s Salaried Class Finally Be Rewarded With Income Tax Relief After Endless Decades Of Being Ignored? Experts Weigh In

Budget 2026: The nation is getting ready to witness the ninth-straight budget by Finance Minister Nirmala Sitharaman on February 1, 2026.

Let us explore some possible tax structure changes and tax relief coming to the way of India’s salaried class.

Hike in Standard Deductions?

A significant majority of middle-class salaried employees is a considerable surge in the standard deduction structures. Presently, it stands at ₹75,000 under the new tax regime. This is expected to rise to ₹1, 25,000 to ₹2, 00,000. This would help the middle class cope well with inflation while increasing their personal disposable income.

It is also believed that the 30 percent tax rate after Budget 2026 may apply to only taxpayers with an income above ₹30 lakh instead of the present threshold of ₹15 lakh.

Is A Higher Income Tax Exemption Limit And TDS Threshold Increase Expected?

Saurabh Jain, Co-founder & CEO, Stable Money, commented that a higher income tax exemption limit or a tax deducted at source (TDS) threshold increase on interest income should be facilitated. Jain also remarked that Deposit insurance and credit guarantee corporation (DICGC) insurance cover that is applicable on fixed deposits should be increased. Presently, it stands at ₹5 lakh per depositor; it should be increased to at least ₹7-10 lakh per depositor.

The PHD Chamber of Commerce and Industry (PHDCCI) has recommended that the income tax rate structures under the new tax regime should be increased. It proposed that the highest IT slab should be raised from ₹24 lakhs to ₹50 lakhs while tax rates should be reduced. This includes 20 percent on income up to Rs. 30 lakhs, 25 percent on income up to Rs. 50 lakhs and 30 percent on income beyond Rs. 50 lakhs.

Sunil Kumar Roy, Professor and Dean, School of Business, Manav Rachna University, remarked that India’s middle class is looking for enhanced simplification and greater clarity between the new and old tax regimes. Roy added that a much-needed and expected Section 80C limit revisions should be facilitated for improving disposable incomes and easing pressure on personal finances.

Stop To Aspiration Drain With Thoughtful Taxation

Rajeev Gupta, Executive Vice President & Business Head – Third Party Products, Religare Broking Ltd, remarked the Union Budget must address the “Aspiration Drain”. Gupta remarked a peak tax rate of 39-43 percent on the country’s highest earners (₹2 Cr) is unarguably an exit trigger and suggested that the effective tax rate must be capped at 30 percent.

A better peak tax rate of 20-25 percent would do a whole lot of good.

Tax Ease A Must

Smita Mazumdar, Program Director, PGDM, Great Lakes Gurgaon, remarked India cannot expect to promote Skill India and demand its youth to become creators of enough jobs while imposing a higher effective burden of tax than corporate tax.

Karthik Narayan, Vice President (Tax & Transition), Stellar Innovations, remarked the Union Finance Minister should facilitate the proposed addition of an innovative taxation band that features a tax of 25 percent on net income between ₹30 lakh and ₹50 lakh should be made for addressing tax imbalances. This proposed new income tax slab would be beneficial for providing the much-expected tax relief to middle-to-upper income earners.

All in all, the Budget 2026 may bring on better savings incentives, higher deductions, better tax slab relief and improved compliance.