Budget 2026 Update: The central government is preparing to present the Union Budget 2026. Farmers, labourers, and salaried individuals have high expectations from this budget. This will be the second Union Budget of the Modi 3.0 government, and it is expected to be significant in many ways.

Union Finance Minister Nirmala Sitharaman is preparing to present her 9th budget on February 1st. This budget could prove to be a booster dose for the middle class.

This time, the focus is not just on tax savings, but on putting more money in the hands of ordinary people amidst rising inflation. According to budget experts, further reforms may be introduced to make the new tax regime even more attractive.

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New Tax Regime to Become Taxpayers’ Choice

According to recent data from the Income Tax Department, a major shift has occurred in tax filing patterns in India. Approximately 72 per cent of taxpayers have adopted the new tax regime, while only 28 per cent remain with the old system. Specialists believe this figure has increased over the past year.

This is mainly attributed to the major announcements made in Budget 2025, including making annual income up to ₹12 lakh tax-free and increasing tax deductions to ₹75,000. The new system is now the default option, and its slabs are more favourable.

Therefore, its acceptance among the middle-income group has increased rapidly. It is expected that Budget 2026 will include further deductions to make it even more attractive, encouraging the remaining taxpayers to switch to this simpler system.

GST Model for Income Tax Department?

The central government may further simplify the tax system. To make it even easier, it may consider introducing a GST-style slab system. According to budget experts, the current slab system can be made more comprehensive with fewer slabs, eliminating confusion for taxpayers.

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This would make tax filing and planning as easy as GST. The biggest expectations this time are for senior citizens and pensioners. Considering the rising healthcare and living costs, the budget may include special concessional tax slabs or a higher tax-free limit for them. For your information, this will be the 12th consecutive pre-budget presentation under the Modi government. Finance Minister Nirmala Sitharaman will present it in the Lok Sabha on February 1st.