Budget 2026 Expectations on Income Tax LIVE: Finance Minister Nirmala Sitharaman is set to present the Union Budget 2026 on 1 February at the Parliament. Ahead of the India Budget, taxpayers are excited to see an income tax cut like last year.
In Budget 2025, FM Sitharaman gave a boost to taxpayers by overhauling the new tax regime to reduce income tax outgo, benefitting the middle class specifically.
Here is all you need to know about the India Budget 2026.
Budget Expectations for Salaried Employees
Salaried employees are expecting a higher limit on the standard deduction, which currently stands at ₹75,000 for the new tax regime. It was earlier increased to ₹75,000 from ₹50,000.
Taxpayers are also expecting relief in TDS (Tax Deducted at Source) rationalisation.
Income Tax Slab Rates for FY 2025-26
Here are the income tax slabs for the old tax regime —
- Income up to ₹2,50,000 – Nil
- ₹2,50,001 to ₹5,00,000 – 5%
- ₹5,00,001 to ₹10,00,000 – 20%
- Income above ₹10,00,000 – 30%
Under new tax regime
- Income up to ₹3,00,000 – Nil
- ₹3,00,001 to ₹6,00,000 – 5%
- ₹6,00,001 to ₹9,00,000 – 10%
- ₹9,00,001 to ₹12,00,000 – 15%
- ₹12,00,001 to ₹15,00,000 – 20%
- Income above ₹15,00,000 – 30%
Old vs New Tax Regime
The main difference between the old tax regime and the new tax regime is the tax slabs. While old tax regime has fewer slabs, the new tax regime separates income into more categories, thus reducing the tax burden for many.
However, the old tax regime is beneficial in terms of the deductions it offers. Under old tax regime, taxpayers can claim various deductions. Under new tax regime, there are only a few deductions that can be claimed, for example the NPS investment.
Key Income Tax Changes in Budget 2025
In last year’s Budget 2025, FM Sitharaman gave a mega boost to Indian taxpayers by cutting income tax on earnings up to ₹12 lakh, benefitting millions of middle class taxpayers. For the salaried class, the non-taxable income under the new tax regime increased to ₹12.75 lakh after standard deduction. She also announced the New Income Tax Act, 2025, which will come into effect from 1 April.
What to expect in 2026 budget?
According to experts, the government is unlikely to make any new changes to income tax slabs. However, expectations are high on the TDS and standard deductions front.
Additionally, there are other Budget expectations from other sectors.
How can you calculate Income Tax for FY 2025-26 (AY 2026-27)?
You will have to enter your income details, including your salary and other sources of income. Choose your tax regime and then place yourself in a tax slab to know your income tax. Alternatively, you can use the Livemint income tax calculator
Follow along for Union Budget Income Tax Expectations LIVE Updates 2026 here.
