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Budget 2026: The middle class is hoping for significant relief from Budget 2026. Finance Minister Nirmala Sitharaman may announce changes to the income tax slabs and an increase in the home loan interest deduction limit to Rs 5 lakh. Amidst rising inflation, taxpayers are focused on decisions that will allow for 'greater savings'.

Budget 2026: Finance Minister Nirmala Sitharaman is set to present her ninth consecutive budget on February 1, 2026. This full budget of the Modi government's third term is not just a financial document, but a repository of the hopes of millions of taxpayers. Amidst rising inflation, the burden of EMIs, and the changing nature of jobs, this year's budget is likely to focus on increasing savings for the common man.

Will there be significant relief in tax slabs?

The biggest concern for the middle class is that while inflation is rising, tax exemptions remain unchanged. It is hoped that Budget 2026 will see the government making changes to the tax slabs to make the New Tax Regime more attractive. There is speculation that the tax exemption limit will be increased to leave more disposable income in people's pockets, encouraging spending and boosting the economy.

Will the confusion in the tax system be resolved?

Currently, taxpayers are caught between the old and new tax regimes. The old system offers deductions like 80C and 80D, while the new system is simpler but doesn't offer benefits on investments. In Budget 2026, the government may introduce a unified or simplified guideline for both systems, making it easier for the salaried class to choose the system that maximizes their savings.

Homebuyers hope for a deduction of up to Rs 5 lakh.

The real estate sector and homebuyers are demanding that the current Rs 2 lakh deduction on home loan interest be increased to Rs 5 lakh. If this happens, not only will the dream of owning a home become more affordable for the middle class, but it will also create new job opportunities in the housing sector. Additionally, considering the rising medical expenses, the government may also consider expanding the scope of health insurance deductions (under Section 80D).

New Initiatives for Salaried Employees and Married Couples

For the first time, the concept of joint taxation (taxation of husband and wife together) is being discussed in this budget. If implemented, it would reduce the tax burden on families with a single income. Furthermore, a separate tax slab for senior citizens or special exemptions for medical expenses are also expected, as pensioners are hit hardest by inflation.