Income Tax Budget: Every year, the mention of the budget alone accelerates the heartbeat of the middle class. But this year, the reason is obvious – income tax! With inflation constantly growing in value, rents sky-high, and salaries not growing at the same rate, common salaried employees have tremendous expectations from Budget 2026.
They have tremendous expectations that the government will wave the matter of taxes, standard deductions, and HRA. The discussion is more intense this time as simplification of the taxation process has been a matter of discussion for a very long time, while relief from the taxation process still appears to be in progress.
Why are the expectations about the standard deduction of ₹1 lakh increasing?
In this way, now in our country on the one hand, there is seen to be some limit to the standard deductions, while on the other side, inflation has been touching new heights itself. The highest demand put forth by the middle class is that at least the amounts in the case of standard deductions should rise to the mark of 1 lakh rupees.
The claim is that there is a substantial increase in transportation expenses, health care expenses, and education and expenses of their children. However, some breathing room may be provided at this point of time with some relief in taxation.
Will the 30% tax slab be applicable only above ₹30 lakh?
Another important requirement is that the 30 percent tax slab should be applicable only above ₹30 lakh instead of ₹15 lakh. It is currently observed that individuals who have even marginally higher incomes are burdened heavily in terms of tax, thus affecting their capacity to generate savings.
However, if the government increases this slab, it can provide relief to the middle and upper-middle class, as well as boost their consumption power, which will boost the economy.
What has increased the call for a change in HRA rules?
The pace at which rent has risen in recent years has created a problem in managing expenditures. Previously, only cities like Mumbai, Bangalore, and Delhi were recognized as expensive places with high rents; however, in recent times, places like Pune, Hyderabad, and Ahmedabad are witnessing quite rapid increases in rents.
As put by a tax expert Abhishek Soni, the amount of the HRA is quite low. They further state that the exemption of an amount equal to 50 percent of the salary in the form of the house rental allowance should not be confined only to metro cities but should be granted to cities where the house rent is now comparable to the metro cities.
Expectations for exemptions like 80D in the new tax system
Although the tax slabs in the new tax system have been made simpler, it still lacks many significant areas of exemption. Particularly, it has been long suggested that the exemption of 80D, which deals with health insurance policies, should continue in the new tax system itself.
In today’s days, medical expenditures are a serious burden on anyone. Hence, providing tax relief on health insurance is highly critical.
Why is the middle class’s expectation from the Budget 2026 justified?
The middle class is also regarded as a backbone of a nation’s economy. This class pays more taxes and also spends more. Thus, if this class gets some relief, then it will definitely affect the free market as well as economic growth.
Therefore, people have been expecting that Budget 2026 not only focus on statistics but also on the pocket of the common man.
Disclaimer: The details are as per available knowledge and suggestions given by experts. The final announcement for decisions about budgets will be made by the government. Before any decisions are made with regard to tax planning and finances, it is advised to refer to official statements or a tax advisor.
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