Budget 2026 Income Tax Expectations: Top 4 Things Individual Taxpayers Want
As the Finance Minister prepares to present the Union Budget 2026 on 1 February, India is facing a highly uncertain economic landscape. Geopolitical tensions, fluctuating oil prices, volatile capital markets, and a shifting exchange rate have made the environment unpredictable. On top of this, India is gearing up for a major tax overhaul with the new Income-tax Act coming into effect from 1 April 2026.
Despite these challenges, one expectation remains constant among individual taxpayers: they want more money in their hands. With rising living costs and growing financial pressure on households, salaried individuals are hoping the Budget will deliver meaningful relief. However, given the upcoming transition to a new tax regime, significant changes may be limited. Instead, the Budget is likely to focus on practical, micro-level reforms that improve compliance and make the tax system more taxpayer-friendly.
Here are the top tax expectations that individuals are hoping will be addressed in Budget 2026.
1. A Higher Standard Deduction: A Direct Relief for Salaried Individuals
One of the most commonly requested changes is an increase in the standard deduction. Currently, the standard deduction stands at:
With inflation pushing daily expenses higher, salaried taxpayers are hoping for a raise to at least ₹1 lakh. This would provide immediate relief to households and help reduce the impact of rising living costs. A higher standard deduction would also simplify tax planning for many employees, especially those who do not claim multiple deductions.
2. EV Perquisite Valuation Rules: Time For A Modern Update
Electric vehicles (EVs) are quickly becoming the future of mobility, and many employers are encouraging employees to switch to EVs through company car policies. However, the current tax rules for perquisite valuation still rely on the engine’s cubic capacity, a measure that is irrelevant for EVs which do not have traditional engines.
Despite these challenges, one expectation remains constant among individual taxpayers: they want more money in their hands. With rising living costs and growing financial pressure on households, salaried individuals are hoping the Budget will deliver meaningful relief. However, given the upcoming transition to a new tax regime, significant changes may be limited. Instead, the Budget is likely to focus on practical, micro-level reforms that improve compliance and make the tax system more taxpayer-friendly.
Here are the top tax expectations that individuals are hoping will be addressed in Budget 2026.
1. A Higher Standard Deduction: A Direct Relief for Salaried Individuals
One of the most commonly requested changes is an increase in the standard deduction. Currently, the standard deduction stands at:
- ₹50,000 under the old tax regime
- ₹75,000 under the new tax regime
With inflation pushing daily expenses higher, salaried taxpayers are hoping for a raise to at least ₹1 lakh. This would provide immediate relief to households and help reduce the impact of rising living costs. A higher standard deduction would also simplify tax planning for many employees, especially those who do not claim multiple deductions.
2. EV Perquisite Valuation Rules: Time For A Modern Update
Electric vehicles (EVs) are quickly becoming the future of mobility, and many employers are encouraging employees to switch to EVs through company car policies. However, the current tax rules for perquisite valuation still rely on the engine’s cubic capacity, a measure that is irrelevant for EVs which do not have traditional engines.Next Story