Income tax relief in Budget 2026? Expert lists 5 key expectations from FM Nirmala Sitharaman

Big changes started with Budget 2020, when Finance Minister Nirmala Sitharaman introduced the new tax regime. The aim was to simplify taxes with lower rates and fewer exemptions and deductions.

Budget 2025 delivered the most significant relief yet. Income up to ₹12 lakh became fully tax-free under the new regime, rising to ₹12.75 lakh for salaried taxpayers after the enhanced standard deduction. Tax slabs were also restructured, easing the burden on middle-income earners.

Alongside these changes, the new Income-tax Act, 2025, replaced the decades-old 1961 law, marking one of the biggest overhauls of India’s income tax system.

What taxpayers are expecting in Budget 2026 from FM Nirmala Sitharaman?

In a conversation with Upstox, Abhishek Soni, CEO & Co-founder, Tax2win lists out 5 things.

1. Taxpayers are mainly expecting more income tax relief in Budget 2026.

2. After recent tax cuts, there is a strong demand for higher exemption limits and lower tax rates, especially to benefit the middle class and increase take-home income.

3. Many taxpayers are also hoping for a simpler and more transparent tax system, with easier ITR filing, fewer tax notices, and less ambiguity in tax rules.

4. Senior citizens are expecting additional relief, including higher basic exemption limits and improved tax treatment for pension and interest income.

5. Overall, taxpayers want a budget that reduces the tax burden, simplifies compliance, and supports income growth and job creation.

Union Budget 2026: Date and time

In 2026, February 1 falls on a Sunday. Before 2017, the Union Budget was traditionally presented on the last working day of February. This practice changed in 2017 when then Finance Minister Arun Jaitley advanced the Budget presentation to February 1.