Budget 2026 Tax Update: This time, salaried people can get big relief in the budget. Due to increase in standard deduction, income up to Rs 13 lakh can become tax free. If this happens, the tax burden on the middle class salary will reduce and more money will be left in hand every month.
Budget 2026 Tax Free Income: If you work and get upset seeing tax deducted from your salary every month, then this time’s budget can bring great relief for you. There is news that on February 1, Finance Minister Nirmala Sitharaman can make such an announcement regarding income tax, due to which earnings up to Rs 13 lakh can be completely tax free. Now the question is how will this be possible? How much money will you save in your pocket and who will benefit the most? Let us understand everything in simple language…
What can change in Budget 2026?
Currently, in the new tax regime, salaried people get a standard deduction of Rs 75,000, but it can be increased to Rs 1 lakh in Budget 2026. If this happens, the tax free income will increase from Rs 12.75 lakh to Rs 13 lakh after the budget. That means whether your salary increases or not, the tax burden can automatically become lighter.
Understand the complete calculation of saving on income tax
Suppose your annual salary is Rs 13 lakh. Currently the standard deduction is Rs 75,000. Taxable income is saved, then tax is calculated. After Budget 2026, standard deduction may be Rs 1 lakh. This will bring taxable income close to zero. Meaning the entire income of Rs 13 lakh can be tax free.
Why can the government do this?
The government’s simple thinking behind this is that more money should come into the hands of the people. Industry organization CII says that if people have more money in their pockets, they will spend more. When people shop, take services and invest, the country’s economy will directly benefit. The government wants people to leave the old tax system and adopt the new tax regime. For this, it is necessary to make the new regime more beneficial.
How much will the middle class benefit?
If this announcement is made, then up to Rs 2-4 thousand more can be saved every month. This will bring in a good amount of money in a year. You can use the same money for household expenses, children’s education, savings or investment. That means the salary will be the same, but the money in hand will be more.
Things to keep in mind regarding tax free income
Right now this is a possible announcement. The final decision will be taken in the budget speech on February 1. Terms and conditions may also change, so complete information will be clear only after the budget. If you are salaried, then keep an eye on every update related to tax in Budget 2026. You can start your tax planning again after the budget.