Budget 2026: Deloitte India Executive Director Tarun Garg feels that senior citizens could get healthcare related deductions, while there is potential for some relief in standard or interest income deductions, ANI reported.
Speaking to the agency on 18 January, Garg said senior citizens could be among the biggest beneficiaries of Union Budget 2026. Further, he believes there is potential to consider higher deductions on interest income and healthcare-related relief, the report added.
The Union Budget for 2026-27 will be presented in the Parliament on February 1 (Sunday), by Finance Minister Nirmala Sitharaman.
Income Tax relief from Centre in Budget 2026?
According to Garg, Budget 2026 is more likely to focus on fine-tuning the new tax regime rather than announcing “path-breaking or huge changes”, noting that the Centre does not “have that kind of a kitty within their availability”.
Here’s what he thinks is possible:
- Senior citizens: “I would call it from an individual tax perspective that the government may want to give some impetus to senior citizens. Medical expenditures are increasing and they have to put in more on their health budget and healthcare, so maybe some bit of additional deductions may be given to senior citizens,” he noted.
- Interest income earnings: He also feels that the government may consider deductions on interest income earned from bank deposits and small savings schemes due to growing demand for the same.
“There is a vast majority of individuals who are saying that this should be increased (from current limits of ₹10,000 for non-senior citizens, and ₹50,000 for senior citizens). Higher exemptions on interest income could help senior citizens cope with inflation and rising living costs,” he added.
- Provident fund: Another targeted change Garg thinks the government can introduce for new tax regime is making provident fund contributions employer driven.
“When we talk about provident fund, you are doing it structurally through the employer, and you do not need to furnish additional proofs for that. This could help bridge gaps between the old and new tax regimes without increasing compliance burdens,” he added.
- Standard deduction: Garg also flagged standard deduction as an area where limited relief could be offered. “This is one area that can see some tweaks. While the old tax regime has seen little change in recent years, the standard deduction under the new tax regime may get further increased by ₹25,000 or more,” he said.
The move would provide relief to salaried taxpayers without reopening tax slab rates, he added.
Income tax rate rationalisation: ‘Don’t see much besides tweaks’
On rate rationalisation, Garg struck a cautious note. “From a rate changes perspective, I do not see there will be much,” he said, adding that slab rates under the new tax regime are unlikely to be altered. However, he said there could be “certain tweaks” on the surcharge side, as the government looks to address inflationary pressures.
“There are demands that maybe one or two percent surcharge may be reduced, but whether that will see the light of the day is something one has to wait for February 1,” he said.
Garg also pointed to improvements in compliance driven by digitisation. Referring to the Annual Information Statement (AIS) and Tax Information Statement (TIS), he said these tools “definitely contain a lot many details about the income taxpayer” and have made return filing easier. “At least 50-60% of the information is already available and pre-filled,” he said, saving time for individuals.
However, Garg cautioned taxpayers to remain vigilant. “You need to check whether these details are correctly populated or not,” he said, warning that errors or duplication could result in the same income being taxed twice if not corrected.
Overall, Garg said Budget 2026 is likely to prioritise targeted relief and administrative ease over broad personal tax reforms.
