Mumbai: With the Union Budget 2026-27 just days away, expectations around income tax relief are rising among salaried individuals, pensioners and small taxpayers. Experts and industry bodies have submitted several suggestions to the government, asking for changes that can reduce tax burden and make compliance easier.
The main demands include a higher standard deduction, changes in tax slabs, and more benefits for healthcare and savings.
ICAI suggests higher deductions and simpler taxes
The Institute of Chartered Accountants of India (ICAI) has submitted a detailed Pre-Budget Memorandum to the government. It has asked for reforms in both direct and international taxes.
ICAI said the goal is to reduce litigation, simplify compliance and support long-term economic growth. The institute has proposed higher surcharge limits and more deductions under the new tax regime.
It has also suggested allowing deductions for medical insurance and for the maintenance of dependent persons with disabilities, even under the new tax system.
Demand for Rs 1 lakh standard deduction
One of the biggest expectations is an increase in the standard deduction. Currently, under the new tax regime, salaried individuals and pensioners get a flat standard deduction of Rs 75,000.
Tax experts are now demanding that this should be increased to Rs 1 lakh to give more relief to the middle class and help offset rising living costs.
Healthcare tax benefits in focus
Preventive healthcare has emerged as another key theme in Budget expectations. According to healthcare experts, most people in India still pay medical expenses from their own pockets.
This could reduce future medical costs and improve public health.
SBI wants TDS relief on savings interest
SBI Research has recommended removing TDS on interest earned from savings bank accounts or increasing the current threshold.
The report pointed out that people are slowly moving away from bank deposits, with their share in household savings falling from 38.7 percent in FY24 to 35.2 percent in FY25. Removing TDS could encourage more people to save in banks.
Possible changes in tax slabs
There is also strong demand to revise income tax slabs. Many taxpayers want the 30 percent tax slab to start at a higher income level, possibly Rs 30 lakh, to reduce pressure on upper-middle-income groups.
If accepted, these changes could make the tax system more friendly and improve disposable income.
What it means for taxpayers?
If even some of these suggestions are accepted, taxpayers could see real benefits in the form of lower taxes, better healthcare incentives, and easier savings.
All eyes are now on Budget Day to see which of these demands become reality.
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