Budget 2026: Every taxpayer's hopes are pinned on Income Tax Slab Relief

As the Union Budget 2026 approaches, expectations are rising among taxpayers, particularly the salaried middle class, common man, who are struggling with higher living costs and limited avenues for tax savings. A combination of slab revision, higher rebates and smoother compliance could make taxation fairer and more predictable.

As income growth lags inflation, taxpayers are pinning hopes on Finance Minister Nirmala Sitharaman to deliver meaningful income tax relief, especially through slab restructuring that can put more money in their hands and simplify compliance.

What changes can be expected in tax slabs?

Taxpayers are expecting meaningful changes in income tax slabs to ease the burden. Middle-class taxpayers are seeking a major shift in the 30% income tax slab, proposing that it begin at ₹40-50 lakh instead of the existing ₹24 lakh. The change would ease the tax burden on higher-earning salaried individuals, allowing households to retain more income for consumption and long-term savings. Supporters argue that a wider slab would make taxation fairer and better aligned with inflation.

Together, a wider slab and a higher section 87A rebate could make taxation fairer, ease the burden on salaried families, and offer real relief against rising living costs.

Old slab vs new slab

The old and new slabs confuse all taxpayers. Due to the coexistence of the old and new tax regimes, leaving salaried individuals unsure which option maximises their take- home pay. Middle-class earners are hoping either for a single, stable regime or for more deductions to be allowed under the new regime. Without clarity, even widened slabs may fail to simplify compliance or ease the financial burden for households. Various deductions and exemptions are allowed in the old tax regime; the new regime offers lower rates of tax but permits limited deductions and exemptions. The taxpayers is hopefull that the budget 2026 will bring meaningful revisions to tax slabs and deductions.

TDS pain point

While taxpayers hope for wider income tax slabs in the budget 2026, they want the benefits to be felt throughout the year, not just when filing returns. Right now, excess TDS (Tax Deducted at Source) often means people get refunds only after the year ends, leaving them with less money to use during the year. Many salaried individuals are therefore asking for better alignment between tax slabs and TDS, so any relief from higher slabs or rebates can help them manage monthly expenses and savings more easily.

Slab Relief Should Come with Simpler Filing

Currently, there are 7 ITR forms, which apply to different categories of taxpayers. Having multiple forms obviously confuses taxpayers, which will increase the chance of errors. Many salaried individuals face mismatches between their Form 26AS and Annual Information Statement (AIS), which often leads to unnecessary notices and compliance hassles. To reduce this burden, they are seeking auto-filled returns and notice-free filing, making it easier to comply with the law without spending excessive time or effort.

To conclude, the taxpayers, middle class, and salaried taxpayers are not only looking at lower taxes, but they are also seeking clarity and relief that is felt throughout the year. Families may find it easier to manage home loan EMIs, meet education costs, and cover healthcare expenses. Ultimately, meaningful reforms will determine whether the budget delivers real benefits for the common man.

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