Budget 2026 Income Tax expectations Live: Salaried, senior citizens expect more relief in new regime
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5 min read | Updated on January 29, 2026, 10:02 IST
SUMMARY
Ahead of the Union Budget 2026-27 on February 1, this blog covers the top updates on expected changes and pre-budget recommendations, as well as insights into personal income tax slabs, rates, and rules, on January 29, 2026. The expectations published here are those of various industry bodies and experts. Please note that Finance Minister Nirmala Sitharaman will present the Budget Speech on February 1, and she may or may not accept any of these suggestions.
Budget 2026 to be presented on February 1, 2026. | Image source: Shutterstock
Budget 2026 Income-tax Live: Why SBI Research wants FD interest to be taxed as LTCG, STCG
SBI Research has suggested treating interest from fixed deposits in the same way as LTCG and STCG. They say it will help boost household financial savings. SBI Research has also suggested reducing lock-in for tax-saving FDs to e years like ELSS funds and removing TDS on savings bank deposits. Read moreJanuary 29, 2026, 10:09 AM
Budget 2026 Income-tax Live: What do experts expect on capital gains?
Ahead of Budget 2026, tax experts are expecting a relaxation in capital gains taxation. While their common demand is to reduce the LTCG tax to 10% and roll-back of STT, industry bodies like AMFI and BCCI have suggested allowing Section 87A rebate on LTCG and STCG from equity mutual funds and shares when the total income is not more than Rs 12 lakh.
January 29, 2026, 10:02 AM
Budget 2026 Income-tax Live: 5 expectations of common man
Tax experts believe this Budget could be a turning point if it addresses everyday concerns like high taxes, expensive housing, retirement planning, and fair treatment of investments.
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Relief on Long-Term Capital Gains (LTCG)
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Push for insurance penetration
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Separate income tax deduction for home loan principal repayments
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Higher home loan interest deduction
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Stronger NPS benefits
Read more details hereJanuary 29, 2026, 09:48 AM
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Salaried employees' perquisites: Clarity sought on the valuation of housing and cars
While higher standard deductions and tax-saving options under the new tax regime are on the wishlists of most tax experts and industry bodies ahead of Budget 2026, some of them are also hoping for clarity on the valuation of certain perquisites offered to salaried employees. They have suggested the government to provide a uniform methodology for perquisite valuation and clarity on their tax treatment, especially with regard to housing accommodation and electrical vehicle perquisites. Read full details hereJanuary 29, 2026, 08:28 AM
Tax experts suggest special income-tax slabs for senior citizens
Tax experts have suggested introducing special income-tax slabs for senior citizens. They say that seniors end up paying the same tax as individuals under 60. Therefore, separate slabs should be introduced for them in the upcoming budget to ensure fairness for the elderly population. Read moreCalculate your taxes for FY 2025-26 here
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Income Tax expectations from Budget 2026 Live: AMFI proposes tax relief during involuntary redemption of mutual fund units
The Association of Mutual Funds in India has recommended amending Section 45 of the Income Tax Act 1961 (Section 67 of the Income Tax Act 2025) to tax capital gains from involuntary winding up of mutual fund schemes on a receipt basis.
"A specific clause should be added to tax distributions made without unit extinguishment upon receipt, similar to Section 45(5) of the Act (Section 67(12) of the Bill), which covers compulsory acquisition with government-approved consideration and subsequent enhancements. Additionally, an explanation should be inserted in Section 2(42A) of the Act (Section 2(101) of the Bill) to include the holding period from the last unit extinguishment to the receipt of additional consideration, allowing unitholders to benefit from this period since winding up is involuntary, unlike voluntary redemption," AMFI said.
"The proposal will obviate undue hardships to tax payers, and ensure equitable and just treatment of proceeds for taxation while ensuring that there is no tax loss to the exchequer," it added.
January 29, 2026, 07:34 AM
