The Modi government is getting ready for the Union Budget 2026-27, which will be presented on February 1, 2026. This is the third full budget in their third term. Many taxpayers – like office workers, older people, and families – are waiting for changes that make taxes easier and help with high living costs.
The budget comes right before the new Income Tax Act starts on April 1, 2026. This new law will replace the old 1961 rules with simpler ones. The Finance Ministry is asking for ideas from businesses until November 10. They want suggestions with reasons, data, and money effects. Last year, the budget made income up to ₹12 lakh tax-free in the new system and added a ₹75,000 standard deduction for salary earners. But the old system, which many still use for deductions like savings or health insurance, did not change much. People want both systems to be fair. Here are five easy changes taxpayers hope to see.
What Happened in Recent Budgets
The Union Budget 2026-27 follows two years of small wins for taxes. In FY25-26, the new tax system got a big break: No tax on up to ₹12 lakh after a rebate, and lower rates up to ₹24 lakh. This saved many people ₹50,000 a year. In Budget 2024, long-term gains tax became a flat 12.5% for most things like shares or property. But the old system – used by 60% of people for perks like ₹1.5 lakh under 80C for investments – stayed the same. Tax money makes up 11.8% of India’s economy. It pays for roads, hospitals, and help programs. With prices up 5%, people need fairer rules. The ministry wants ideas that do not lose too much government money.
5 Income Tax Changes People Want in Budget 2026-27
These ideas come from experts and what people say online. They focus on making taxes fair and simple.
- Help for Old Tax System Users: Higher No-Tax Limit and More Deductions- People who use the old system want the no-tax limit to go from ₹2.5 lakh to ₹3–4 lakh. This matches price rises over 10 years. They also want the 80C limit for savings like PPF or school fees to rise to ₹2 lakh. Health insurance under 80D could go to ₹50,000 (₹1 lakh for older people). This would save ₹15,000–25,000 a year and help switch to the new system without losing family benefits.
- Easier Rules: Quick Refunds and Auto-Filled Forms- Matching tax deductions and waiting 4–6 months for refunds is hard. People hope for refunds in 15 days with the new law’s “tax year” idea. Forms could fill themselves by September using AI (not December now). This would cut mistakes by 30%, says the tax department. Freelancers want simpler papers for side income.
- More Help for Homes and Health: Bigger Deductions- Home loans average ₹50 lakh now. The ₹2 lakh limit on interest under Section 24 feels old – raise it to ₹3 lakh in both systems to help new buyers. Health under 80D could go to ₹40,000, ₹75,000 for long-term illness. Older people want ₹60,000 tax-free on savings interest like SCSS. Health costs are up 8%, so this would ease pain.
- Simple Gains Tax: Same Rate for All Investments- Tax on profits from shares, homes, or bonds is confusing at 10–20%. People want one 15% rate for long-term gains, with 18 months to hold anything. Bring back price adjustments for old home sales to save ₹1–2 lakh. This would help markets and stop ₹40,000 crore in hiding, per experts.
- Clear Rules for Online Money and Overseas Work- Crypto needs a 20% tax with loss carry-over, not 30% now. For workers abroad or with side jobs, easier tax on foreign pay and double-tax fixes. Tax on company shares at give-time (not sell) would help startups keep talent. The new law’s online reports fit this with Aadhaar checks.
Getting Ready for the New Income Tax Act from April 2026
Budget 2026-27 is the step to the Income Tax Act, 2025. It cuts rules from 800+ to 500, changes “assessment year” to “tax year,” and lets refunds on late forms. It keeps breaks for homes and rent. People want Budget help like carrying losses and easy switches. Tests show 25% faster work, but no surprises mid-year.
What People Hope from Budget 2026-27
People want fair systems, easy filing, and help for costs – without hurting government money (deficit at 4.8%). For Finance Minister Nirmala Sitharaman, it’s about smart changes. This budget could make taxes friendlier and help growth. What change do you want most? Tell us below.