Union Budget 2026: Union Finance Minister Nirmala Sitharaman is all set to present her ninth Union Budget on Sunday, February 1st. People have high expectations for Budget 2026. Less than 20 hours remain until the Union Budget is presented. In the last budget, the government provided significant relief to the middle class by making income up to ₹12 lakh tax-free. Now, the eyes of the youth, taxpayers, and farmers are fixed on Budget 2026. Salaried taxpayers are hoping for further relief in income tax and salary deductions this time as well. The middle and salaried classes are now waiting to see whether the government will offer any new income tax benefits in Budget 2026.
In the Union Budget 2025, Finance Minister Nirmala Sitharaman exempted the middle class from income tax on income up to ₹12 lakh per annum. This limit was even higher for salaried employees, as after availing the standard deduction of ₹75,000, the tax-free income reached ₹12.75 lakh.
Budget 2026 Income Tax Expectations:
Income tax has always been the most important part of the budget. Middle-class families and salaried individuals, in particular, eagerly await the budget announcement to see if their tax burden will be reduced. Tax experts and the salaried class are expressing their expectations.
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Salaried Employees Tax News:
The biggest demand of salaried individuals is to increase the standard deduction. Currently, the standard deduction in the new tax regime is ₹75,000. It is being said that this could be increased to ₹1 lakh in Budget 2026. If this happens, salaries up to ₹13 lakh per annum could become tax-free under the new tax regime, providing significant relief to the middle class.
In addition, there is a growing demand to simplify and rationalise TDS (Tax Deducted at Source). Salaried individuals want the TDS (Tax Deducted at Source) rules simplified to avoid frequent refunds.
Old Tax Regime:
Up to ₹2.5 lakh – No tax
₹2.5 lakh to ₹5 lakh – 5%
₹5 lakh to ₹10 lakh – 20%
Above ₹10 lakh – 30%
New Tax Regime:
Up to ₹3 lakh – No tax
₹3 lakh to ₹6 lakh – 5%
₹6 lakh to ₹9 lakh – 10%
₹9 lakh to ₹12 lakh – 15%
₹12 lakh to ₹15 lakh – 20%
Above ₹15 lakh – 30%