Budget 2026 Expectations India Live Updates: Taxpayers Eye Rs 1 Lakh Standard Deduction, LTCG Tweaks, Senior Citizen Relief

Women taxpayers are looking to Budget 2026 for stronger income tax relief and gender-intentional policies under the new tax regime. Key expectations include raising the standard deduction from Rs 75,000 to Rs 1 lakh or even Rs 1.5 lakh, enhanced Section 87A rebate for higher disposable income, and allowing more deductions for savings, health insurance and housing.

Experts also see scope for targeted incentives for women investors, working mothers and women-led businesses to boost financial inclusion and long-term wealth creation.

Ahead of the Union Budget, CoinSwitch co-founder Ashish Singhal said India’s virtual digital asset (VDA) ecosystem has reached a critical inflection point, marked by rising adoption but constrained by a tax regime that he argued creates friction for retail investors. Singhal said the current framework taxes transactions without accounting for losses, making participation costly and discouraging fair market activity.

He suggested that lowering the TDS on VDA transactions from 1% to 0.01% could significantly improve liquidity, ease compliance burdens and enhance transparency, while still maintaining traceability of transactions. Singhal also proposed raising the TDS threshold to Rs 5 lakh to shield small investors from a disproportionate tax impact. Noting that VDA taxation was introduced in 2022 as a temporary substitute for regulation, he said the ecosystem now operates under stronger oversight from FIU-IND and improved compliance standards.

According to him, the upcoming Budget offers an opportunity for the government to revisit and recalibrate the tax framework in a way that supports investors while aligning with revenue and regulatory objectives.

Buzz is building that the 2026–27 Budget may speed up the phased withdrawal of the old tax regime. While there is no indication of an immediate scrapping, taxpayers who rely on deductions such as Sections 80C and 80D are closely tracking signals on how and when the transition could unfold.

After recent gains such as higher standard deduction and family pension relief, senior citizens are now watching Budget 2026–27 for enhanced healthcare deductions and simpler compliance norms. Experts argue that focused support for retirees is essential as medical expenses climb while incomes stay largely fixed.

Granting industry status would improve access to institutional funding, reduce borrowing costs, and enhance transparency, enabling the sector to play a stronger role in job creation and economic growth, Pradeep Aggarwal, Founder & Chairman, Signature Global (India) Ltd. said on real estate sector’s Budget demands.

“As we approach the Union Budget 2026, the real estate sector remains optimistic, with expectations focused on sustained policy support to improve housing affordability, ease liquidity constraints, and maintain long-term growth momentum. Continued government interventions through fiscal incentives, financing support, and demand-stimulating measures will be critical in strengthening end-user confidence and ensuring the sector’s steady contribution to the broader economic recovery,” he said.

Granting industry status would improve access to institutional funding, reduce borrowing costs, and enhance transparency, enabling the sector to play a stronger role in job creation and economic growth, he added.

He also called for the extension and reintroduction of the Credit Linked Subsidy Scheme (CLSS) which could provide meaningful relief to aspiring homebuyers.

“Expanding the definition of affordable housing to include homes priced up to Rs 1 crore would better reflect current market realities and reinforce the government’s ‘Housing for All’ vision. If implemented, such reforms could unlock significant growth potential, support sustainable development, and enable the sector to make a stronger contribution to the country’s broader economic goals,” Signature Global (India) Chairman said.

Experts have flagged three key priorities under the new tax regime ahead of Budget 2026 — raising the standard deduction beyond the current Rs 75,000, allowing home loan interest deduction to ease housing stress, and rationalising long-term capital gains (LTCG) tax on equity and mutual funds under the new tax regime.

These measures are seen as crucial to improving disposable income, supporting homebuyers and investors, and making the new tax regime more balanced and attractive for salaried and middle-class taxpayers.

“Tourism and hospitality are deeply interlinked with regional development, employment, and India’s global perception. While several states have already accorded industry status to hospitality, a uniform recognition at the national level—along with infrastructure status at the Centre—would provide long-term clarity and confidence for investors,” said

Harshavardhan Neotia, Chairman, Ambuja Neotia Group.
“For destination-led resorts and experiential hospitality, the restoration of input tax credit across GST slabs would be a meaningful reform. Increased allocation to initiatives such as UDAN, along with sustained investment in the Incredible India programme, can further unlock the potential of India’s scenic and culturally rich locations as global leisure destinations,” he added.

As the Union Budget nears, the freight forwarding and logistics industry is hoping the government maintains its emphasis on infrastructure-driven expansion, faster multimodal connectivity, streamlined GST and customs processes, and policy support that aligns with shifting global supply chains, said Gayomard Driver, CFO of Jeena & Company, a freight forwarding and supply chain solutions firm. He noted that such measures could help reduce logistics costs, improve capital efficiency, and reinforce India’s position as a competitive global trade and manufacturing hub.

Driver added that the sector expects initiatives that firmly position logistics at the centre of global competitiveness. Greater attention to sustainability, simplification of tax structures, ease of doing business, focused skill-development efforts, and faster technology adoption would not only enhance logistics capabilities but also serve as a key driver of long-term economic growth.

He further said a Budget that boosts infrastructure funding while simplifying regulatory frameworks would strengthen India’s logistics ecosystem and create a more stable environment to attract private investment.

Faster and structured tax dispute resolution and use of mediation along with enhancing transfer-pricing certainty via quicker processing of Advance Pricing Agreements (APA) are the top two direct tax reforms which should be prioritised in the budget to improve India’s competitiveness and investment climate, according to a survey by ET-PwC.

As per the survey results, 44% of the respondents have pushed for faster tax dispute resolution and use of mediation while 39% sought faster APA processing. Rationalisation of corporate tax incentives for manufacturing and simplification of withholding tax provisions are the other tax reforms they want.

Multiple expert bodies have pitched a higher standard deduction under Section 19 of the Income Tax Act, 2025, which replaces Section 16 of the old law from April 1, 2026. KPMG has suggested raising the deduction to Rs 1 lakh, while ICAI has proposed allowing separate standard deductions for both spouses under a joint taxation framework. Any such move in Budget 2026 could significantly boost take-home pay for salaried taxpayers.

As the simplified Income Tax Act, 2025 is scheduled to take effect from April 1, industry stakeholders are looking to Budget 2026 for clear transition guidelines, implementation rules and comprehensive FAQs. Tax experts stress that detailed clarity will be vital to ensure a smooth shift for taxpayers, employers and professionals from the existing law to the new framework. Well-defined directions on compliance, reporting requirements and interpretation are considered essential to minimise confusion and potential disputes during the first year of the new tax regime.

Ahead of the Budget, experts and industry bodies are urging the government to sharply raise the standard deduction for salaried employees under the Income Tax Act, 2025, which comes into force from April 1, 2026. The deduction, currently capped at Rs 75,000 under the new tax regime and Rs 50,000 under the old regime, is proposed to be increased to Rs 1.5 lakh to offset rising inflation and living costs. AMCHAM India has formally recommended this hike in its pre-Budget memorandum.

Capital gains taxation remains a major concern for investors. Following frequent changes in tax treatment for equities, debt mutual funds and property, investors are seeking simplification in holding periods, tax rates and indexation rules. Similar clarity is being sought on home loan tax benefits, especially after slab restructuring reduced the relevance of some traditional deductions.

Retirement taxation is another key focus area. With higher employer contributions now allowed under the National Pension System (NPS), savers are looking for clearer rules on EPF and NPS withdrawals, annuities, and even mutual fund-linked retirement products. Senior citizens and pensioners, meanwhile, are expecting greater relief on pension income, healthcare-related deductions and compliance norms.

The Section 87A rebate is another area under the spotlight. Expanded from the earlier Rs 5 lakh threshold, it now effectively ensures zero tax up to Rs 12 lakh under the new regime. The middle class hopes Budget 2026 may stretch this benefit further — possibly up to Rs 15 lakh — to offset inflation and rising living expenses. There is also growing demand for parity in standard deduction benefits between the two tax regimes, particularly after the recent hike to Rs 75,000.