Budget 2026: Will new tax slabs ease the burden on middle-income taxpayers?
As Budget 2026 approaches, middle-income taxpayers are watching closely for signs of relief. With rising costs and inflation pressures, the big question is whether the government will tweak tax slabs to ease the burden.
Expectations are high among salaried taxpayers who are eager to see whether the government will announce any meaningful tax relief in the Union Budget 2026. While a major overhaul of the income tax framework appears unlikely, experts believe the budget may still bring small but thoughtful adjustments.
According to Suresh Surana, the government is expected to continue its gradual push toward the new tax regime, focusing on simplicity and wider adoption rather than sweeping reforms.
NEW TAX REGIME LIKELY TO GET SMALL TWEAKS
Surana says Budget 2026 is expected to build on the refinements introduced in recent years. Instead of dramatic announcements, the government may opt for practical fine-tuning that improves the usability of the new regime.
“Budget 2026 is expected to continue the government’s gradual shift towards making the new tax regime more attractive and widely adopted,” he said. “While no dramatic overhaul is anticipated, there is a reasonable expectation of fine-tuning, particularly to enhance simplicity and provide targeted relief.”
He added that marginal changes to income tax slabs under the new regime may be considered to account for inflation and rising living costs, especially for middle-income earners.
BIG SLAB CHANGES UNLIKELY
When it comes to income tax slabs, Surana believes that major revisions are unlikely this year. Most significant changes have already been introduced in previous budgets.
“A major revision of existing income tax slabs appears unlikely in the Union Budget 2026,” he said. “Instead of a complete overhaul, the focus is more likely to be on targeted relief measures, such as marginal threshold adjustments or fine-tuning of rates to address inflation-led bracket creep.”
This implies that while taxpayers should not expect large-scale slab restructuring, smaller adjustments may still help ease the burden modestly.
STANDARD DEDUCTION INCREASE ON THE TABLE?
One area that may bring some relief to salaried taxpayers is the standard deduction. Surana believes the government could consider enhancing it under the new regime.
“There is a reasonable possibility that the government may consider increasing the standard deduction under the new tax regime,” he said. “This could provide broad-based relief to salaried taxpayers without complicating the tax structure.”
An increase in the standard deduction would benefit a wide base of salaried individuals while keeping the system simple.
WHAT SALARIED TAXPAYERS CAN REALISTICALLY EXPECT
Overall, Surana advises taxpayers to maintain realistic expectations as the Budget is presented today. Any tax relief is more likely to be measured and purposeful than sweeping.
“Salaried taxpayers can expect limited but meaningful relief, potentially through a higher standard deduction, minor slab adjustments, or improved tax thresholds,” he said. “Any relief is likely to be targeted and incremental rather than broad-based.”
With the government focused on simplifying income tax laws, Budget 2026 may not deliver major surprises, but thoughtful, incremental changes could still offer real comfort to middle-income earners.