Union Budget 2026: Nirmala Sitharaman Expected to Announce 10 Major Reliefs for Taxpayers

With Union Budget 2026 fast approaching, the hopes of millions of taxpayers. Across the country are once again pinned on Finance Minister Nirmala Sitharaman. In recent years, the government has taken several steps to promote the new tax regime, but considering the current economic landscape, rising inflation, and evolving needs, some major decisions are expected in this year's budget. Based on the demands and suggestions from experts and industry stakeholders, it's anticipated that the Finance Minister. May announce relief on 10 significant issues in her budget speech, directly benefiting the common public and various sectors. These potential announcements aim not only to leave more money in taxpayers' pockets but also to stimulate different facets of the economy.

Anticipated Tax Slab Revision

In the previous budget, the government made significant changes to the tax slabs. Under the new tax regime, effectively making income up to Rs 12 lakh tax-free. However, taxpayers who opted for the old tax regime didn't receive any such relief. This time, there is a strong expectation that the government might introduce. Some adjustments to the tax slabs in the old regime as well. This move would provide financial relief to those choosing the old regime, helping to balance the benefits between both regimes and ensuring that all categories of taxpayers receive some advantage, while such a revision could prove to be a major relief for the common person amidst prevailing inflation.

Reduction in TDS Rates

Currently, various TDS (Tax Deducted at Source) rates are applicable for different financial transactions, which often leads to considerable confusion for taxpayers and businesses, making compliance challenging. Experts believe that to simplify this process and enhance transparency, the Finance Minister might reduce the number of TDS rates Importantly, possibly limiting them to just 2 or 3 main categories. This step would streamline tax compliance and promote ease of doing business across the country.

Higher Home Loan Deduction

The real estate sector has long been advocating for an increase in the tax exemption limit on home loan interest, while presently, under Section 24B of the Income Tax Act, a deduction of up to Rs 2 lakh is allowed on home loan interest. In this budget, the government is expected to increase this limit to Rs 4 lakh. This measure would provide substantial financial relief to homebuyers, stimulate investment in the housing sector, and encourage more people to purchase their dream homes, thereby boosting the overall real estate market.

The Institute of Chartered Accountants of India (ICAI) has suggested to. The government the introduction of 'Joint Taxation' for husbands and wives. This system is already successfully implemented in many developed countries like the United States and Europe. If adopted in India, it could Importantly reduce the overall tax liability for working couples, as they would be able to declare their incomes jointly and potentially fall into a lower tax bracket. This would represent a major financial benefit for families and simplify tax planning.

LTCG Limit Hike

For investors in the stock market and mutual funds, an increase. In the tax-free limit for Long Term Capital Gains (LTCG) is anticipated. Currently, profits up to Rs 1. 25 lakh from equity and equity-oriented mutual funds in a financial year are exempt from tax. There is a possibility that this limit could be raised to Rs 1. 5 lakh in the upcoming budget. This step would encourage investors to channel more funds into the stock market, thereby strengthening the capital markets and fostering a more strong investment environment.

Insurance Deduction in New Regime

Until now, tax deductions on term insurance and health insurance premiums have only been available under the old tax regime. To make the new tax regime more attractive and encourage its adoption, the government might announce tax exemptions on insurance premiums within the new regime in this budget. This move wouldn't only popularize the new regime but also motivate individuals to purchase insurance policies, thereby enhancing financial security and promoting a culture of savings and protection.

New Definition of Affordable Housing

With the continuous rise in property prices in India's metropolitan cities, the existing definition of 'affordable housing' has become increasingly irrelevant, while currently, only homes priced up to Rs 45 lakh are considered 'affordable,' which excludes many middle-class individuals in major cities from benefiting from related schemes. The government is expected to increase this limit to Rs 75 lakh, allowing more people to avail the benefits of affordable housing schemes, while this measure would help address the urban housing challenge and make homeownership more accessible for the middle-income group.

Low-Interest Loans for EVs

To combat environmental pollution and promote electric vehicles (EVs) in the. Country, the government is likely to introduce significant measures in this budget. It's expected that the government may announce incentives or subsidies to reduce interest rates on EV loans. This would make electric vehicles more affordable, thereby increasing public interest in purchasing EVs over petrol-diesel vehicles. This initiative would also contribute Importantly to achieving the nation's green energy goals and reducing its carbon footprint.

Changes in Debt Fund Tax Rules

In the previous budget, the tax rules for profits from debt funds were tightened, treating them as short-term capital gains, which led to a decline in investor interest in these funds, while this time, the government may attempt to attract investors back to debt funds by relaxing some of these rules. This step would revitalize the debt market and help investors maintain a balanced portfolio across various investment options, ensuring stability and growth in the financial sector.

Standard Deduction in Old Regime

While the standard deduction in the new tax regime has increased to Rs 75,000, it remains static at Rs 50,000 in the old tax regime. Given the rising inflation and cost of living, it's anticipated that the government may announce an increase in the standard deduction for the old regime as well. This measure would provide significant financial relief to salaried employees who opt for the old regime, thereby increasing their disposable income and offering much-needed support in managing household expenses.