Budget 2026: Salaried India Gets Simplicity, Not Surprises

No fireworks expected on the personal tax front in Budget 2026, but smart tweaks to standard deductions and TDS could ease compliance for salaried earners.

For taxpayers hoping for a Budget 2026 surprise, the writing’s already on the wall: no major changes to personal income tax slabs are expected. The new regime—already the default structure—remains in force for FY 2025–26 (AY 2026–27), offering clarity if not cheer.

Still, small shifts—like a likely hike in standard deduction—could put extra cash in salaried hands, especially for those in the ₹8–15 lakh range who don’t rely heavily on deductions.

Slabs Stay, Expectations Shift

The new regime slabs, introduced with significant relief last year, are holding firm:

• A ₹75,000 standard deduction and a ₹60,000 rebate under Section 87A ensure zero tax liability up to ₹12 lakh in gross income.
• The old regime (with deductions like 80C/80D) remains opt-in, with no discontinuation expected—especially useful for HNIs and those with home loans or insurance-heavy portfolios.

There’s buzz about raising the standard deduction to ₹1 lakh, but it remains speculative until Budget day.

Who Gains—and Who Doesn’t

For salaried taxpayers without large deductions, the new regime often wins. Here’s how it breaks down:

• Those in the ₹8–15 lakh range benefit the most—simple income, no deductions, lower tax bills.
• But high earners with investments, loans, or deductions may still find the old regime more tax-efficient, despite the 30% slab kicking in early.

One CA quips: “For the first time in decades, your tax advisor may say—do nothing. Just opt default.”

Deductions, Surcharges & Cess: As-Is

Don’t expect tinkering here:

• Standard deduction: ₹75,000 (new), ₹50,000 (old)
• Rebate: ₹60,000 (new, up to ₹12L income); ₹12,500 (old, up to ₹5L)
• Surcharge: 10–25% (capped at 15% on capital gains/dividends)
• Health and education cess: Steady at 4%

While relief tweaks have been front-loaded in earlier budgets, compliance easing may be the new focus—especially around TDS thresholds and documentation for salaried filers.

Capital Gains & TDS: Status Quo for Now

If you were expecting clarity on capital gains reform—sorry, not this time.

• Long-term capital gains (LTCG) tax: 12.5% after ₹1.25 lakh exemption (equities)
• Short-term gains (STCG): Taxed per slab
• No major rejig of TDS/TCS rules yet, though recent increases in thresholds for higher-value transactions offer relief.

There’s chatter about joint filing slabs or capital gains indexation tweaks, but they’re likely parked until a more extensive reform round.

TL;DR:

Budget 2026 likely keeps personal tax slabs and regimes unchanged, but a possible bump in standard deduction and simplified TDS rules could ease salaried stress. Middle-income earners remain the big winners.