Union Budget 2026: What Salaried Taxpayers Are Hoping For and Why It Matters

With the Union Budget 2026 just around the corner, salaried taxpayers across India are keenly watching what Finance Minister Nirmala Sitharaman might announce on February 1, 2026. After last year’s major tax relief measures , individuals earning a salary want further income tax benefits, simpler tax compliance, and better take-home income . Experts and taxpayers alike have shared their Budget 2026 expectations as anticipation builds.

Income tax is one of the most talked-about parts of any Union Budget, especially for salaried workers and middle-class families who closely follow changes that can reduce their tax burden. In last year’s budget, the government made significant changes, including making income up to ₹12 lakh tax-free and increasing the effective tax-free limit for salaried people to ₹12.75 lakh due to the ₹75,000 standard deduction .

Higher Standard Deduction in Union Budget 2026

One of the main Budget 2026 expectations for salaried taxpayers is an increase in the standard deduction. Currently, the standard deduction under the new tax regime is ₹75,000. Many workers hope this could be raised to ₹1 lakh in the upcoming Union Budget 2026, which would mean income up to ₹13 lakh could be tax-free for many salaried individuals. This change would help households manage rising living costs and boost disposable income.

Simplifying TDS and Rationalising Tax Rules

Another key expectation from salaried taxpayers in Budget 2026 is simplification of TDS (Tax Deducted at Source) rules. Many believe rationalising TDS procedures could make tax compliance easier and less confusing, especially for monthly salary earners. Experts think that clearer, simpler TDS rules could reduce the administrative burden and the chances of unnecessary tax deductions.

Income Tax Slabs and What They Mean

Salaried taxpayers also pay close attention to income tax slab structures when the Budget is announced. Under the current old tax regime, income up to ₹2.5 lakh is taxed at nil, and higher slabs are taxed progressively up to 30 percent. Under the new tax regime for 2025–26, tax-free income starts at ₹3 lakh and increases through multiple brackets before reaching the top rate.

While experts generally expect that the government may not make major changes to income tax slabs in Union Budget 2026, small improvements like adjusting the standard deduction and simplifying tax rules could still make a noticeable difference for salaried households.

Why These Changes Matter to Salaried Employees

For many salaried taxpayers, even modest tax changes can significantly affect monthly budgets. Higher standard deductions and streamlined TDS procedures can increase take-home pay and help families better cope with rising expenses like rent, education, and healthcare. As many middle-class individuals juggle everyday costs, these expectations for Budget 2026 tax relief remain front of mind.

With just one day to go before the Union Budget 2026 speech, these hopes reflect a broader desire among salaried Indians for income tax relief that is meaningful and directly improves their financial well-being.