New Delhi: What relief can be expected on the income tax front in the country's upkeep (Budget 2026) to be presented on February 1? This is the biggest question today. In the last budget, the Finance Minister took several steps to make the new tax regime increasingly attractive.
Is major tax relief on the way?
The telescopic of tax exemptions was increased so that increasingly people would segregate the new regime. Experts believe that a major relief on income tax is unlikely this time, but the government may make some announcements to remoter modernize the new regime. This is considering the old tax system still has some provisions that make it attractive.
Why are low deductions a major problem?
The limited provisions for deductions in the new tax system are a major problem. Under this, taxpayers can only requirement standard deductions and employer contributions to NPS, while benefits like HRA and medical insurance are not available. Experts say that including some essential deductions in the new tax regime can make it increasingly attractive. The new system is simpler than the old one, but the lack of deduction provisions is a problem.
Will the Standard Deduction Limit Increase?
Nitin Baijal, Executive Director at Deloitte India, says that medical expenses are constantly increasing, and the sparsity of a Mediclaim deduction in the new tax system is a major issue. He moreover says that if the Finance Minister increases the standard deduction limit, it could provide relief. This could goody salaried individuals who have opted for the new tax system, foregoing several exemptions. According to Vijay Maheshwari, Founder of Stocktic Capital, increasing the standard deduction to Rs 1-1.25 lakh would help recoup for inflation and modernize the take-home income of salaried employees who are part of the new system. Benefits of Education Loans
According to experts, the tax benefits associated with education loans and home loans are moreover limited to the old tax system. Therefore, the Upkeep 2026 should consider bringing these under the new tax regime. They say that managing these deductions is quite easy, as they are linked to banks and formal financial institutions. Most of the information is once misogynist through wall statements and employer systems, so compliance will not be an issue. Including such benefits could modernize the practicality of the new system and vamp increasingly taxpayers.
What are expectations for senior citizens?
The new tax system is still not particularly lulu for senior citizens. It does not indulge for a higher vital exemption limit and health insurance deductions, plane though medical expenses increase rapidly with age. Experts say there is zaftig telescopic to provide spare relief to senior citizens under the new system. Therefore, it is hoped that Nirmala Sitharaman will make some necessary provisions in this budget. The old tax regime still offers several advantages for senior citizens, which is why they prefer to remain under the old system.
Why is the old regime attractive?
Experts say that salaried employees whose salaries include HRA find the old system increasingly appealing. Although the new regime has fewer tax slabs, it does not offer several exemptions. These include House Rent Allowance (HRA), deductions on investments under Section 80C, deductions on health insurance premiums, and deductions on interest on home loans under Section 24.
Therefore, if the government wants to make the new system increasingly attractive, it will have to consider providing some of these exemptions. It is widely expected that the Finance Minister will make some utterance in this regard.
