Budget 2026 is just days away, and this year the debate is centred more on day-to-day tax issues than on big announcements. Ordinary taxpayers are keen to know how beneficial the new financial year will be, especially as a new Income Tax law is scheduled to come into effect from April 1. Many hope that frequent rule changes do not lead to confusion or recurring compliance problems.
One of the most significant changes proposed under the new law is the introduction of a ‘tax year’ system. Until now, the year in which income was earned and the year in which tax was assessed were treated separately, often creating confusion. According to Anita Basur, Partner at Sudit Parekh & Co LLP, income will now be earned, reported, and assessed in the same year, making the process simpler and more transparent for taxpayers.
Tax Compliance Set to Become More Stringent
The new system is also expected to bring stricter compliance requirements. Revised income tax return forms will require detailed disclosures related to house rent allowance, home loan interest, and investments under Sections 80C and 80D. These details will be matched with AIS and Form 26AS, indicating that the tax framework is moving towards a data-driven and tighter monitoring system, Basur added.
Expectations among salaried taxpayers may be limited, but their demands remain clear. Chartered Accountant Sakshi Jain said the middle class needs genuine relief rather than symbolic changes. She highlighted the need to increase the standard deduction and pointed out that the Rs 2 lakh cap on home loan interest has remained unchanged for several years despite rising property prices.
Capital gains taxation remains a major concern. Jain described the existing structure as complex, calling for simpler holding periods and tax rates. She also questioned the logic of multiple TDS provisions, especially when many transactions already fall under the GST regime.
System Preparedness Emerges as a Concern
Concerns have also been raised about the readiness of the tax administration. Chartered Accountant Isha Jaiswal noted that appellate authorities are currently handling over 5.5 lakh pending cases. She said the real challenge lies not in the law itself but in the lack of clarity around forms, filing procedures and official guidelines. In the absence of timely instructions, even honest taxpayers could unknowingly make mistakes.
According to Ritika Nair, Partner at Singhania & Co, meaningful relief for the middle class would require an increase in the basic exemption limit, wider tax slabs, and a higher standard deduction. She also suggested bringing back certain essential deductions in the new tax regime to help households cope better with inflation.
Market participants are also watching the Budget closely. Kunal Savani, Partner at Cyril Amarchand Mangaldas, said clear guidance is needed on how the Section 87A rebate will apply to capital gains income. Clear rules on this front could help reduce the tax burden on investors and boost market participation.
Take-Home Pay Remains Key Question for Salaried Class
For salaried individuals, the most important concern remains monthly take-home pay. Alay Razvi, Managing Partner at Accord Juris, said Budget 2026 should make the new tax regime more attractive by increasing standard deductions, rationalising tax slabs and improving exemption limits. He noted that while large tax cuts may be unlikely
