The Union Budget 2026–27 countdown has started and taxpayer expectations continue to rise. Finance Minister Nirmala Sitharaman will deliver her ninth consecutive Budget presentation on February 1 which marks the third full Budget of the Modi 3.0 government and centers on income tax relief.
The new tax regime in Budget 2025–26 introduced major tax breaks which exempted annual income up to ₹12 lakh from taxation thus creating a situation in which salaried workers senior citizens and homebuyers now expect minor adjustments instead of major system overhauls. This year the government aims to achieve three objectives which include simpler compliance measures and specific benefits and better understanding of India’s dual tax regime system.
What salaried taxpayers are expecting
Salaried workers demand two specific tax benefits through their request for higher basic exemption limits and increased standard deductions which fall under the old tax system. The supporters of the new tax system demand better tax brackets together with higher limits for the 30 percent tax brackets which experts recommend should start at ₹30 lakh. The new tax system needs to permit popular deductions which include Sections 80C and 80D together with home loan interest deductions according to growing public demand.
Senior citizens seek targeted relief
Senior citizens are hoping for a higher tax-free income limit, enhanced deductions on health insurance premiums and greater exemption on interest income from bank deposits and small savings schemes. Simplifying income tax return filing for pensioners and retirees, particularly those dependent on interest income, remains a long-standing demand.
Capital gains, home loans and women taxpayers
Investors expect tax relief on long-term capital gains (LTCG) tax for equity investments and mutual funds because they want to know their tax treatment will remain stable. Homebuyers want home loan interest deductions through Section 24(b) to increase while they also need extra benefits designed for first-time buyers and women buyers.
Women taxpayers want larger tax rebates together with special deductions and benefits that will help them join the workforce and save money for their future needs.
Compliance and structural reforms in focus
Across income groups, taxpayers are calling for rationalisation of surcharge rates, relief from the high cess burden, faster refunds and fewer tax notices. Simpler income tax return filing, improved pre-filled data and reduced litigation are among the most common expectations ahead of the Budget.
The ongoing discussion about the old tax system’s future has gained new momentum. The government plans to actively promote the new tax system while taxpayers who depend on deductions prefer a slow transition to the new system instead of an immediate switch.
Budget Day is nearing yet the main requirement persists: people need tax relief that covers all income groups together with unchanging tax policies and an easy-to-understand tax system which will increase their available money and lead to better tax compliance.
