Budget 2026: Good news for middle class and taxpayers, this time there will be many big changes, know here London Journal

Discussions regarding Budget 2026 have intensified, as Finance Minister Nirmala Sitharaman is scheduled to present her full budget on February 1, 2026. Following the radical changes made last year (Budget 2025), this time too, many big announcements are expected for the middle class and tax payers. Let's know what changes we can see in Budget 2026.

Increase in Standard Deduction: Under the new tax regime, the currently available exemption is ₹75,000. Experts estimate that this could increase to ₹100,000 due to rising inflation. This will directly increase your take home pay.

Income tax slab and rebate relaxation: In the last budget, income up to ₹12 lakh (₹12.75 lakh including standard deduction) was exempted from tax. This time, there is a demand to increase this limit to ₹14 lakh. Currently, income above ₹24 lakh is taxed at 30%. Industry and the middle class are demanding that this limit be raised to ₹30 lakh or ₹40 lakh, so that the middle class has more money to spend.

Home Loans (Section 24b) and Health Insurance Home Loans: To make the new tax regime more attractive, the government may consider giving a concession of up to ₹2 lakh on home loan interest, which was currently available only under the old regime. In view of rising medical expenses, the exemption limit on health insurance premium is likely to be increased from ₹25,000 to ₹50,000.

Old vs New Regime Tax: The government is now focusing on the new tax regime. Budget 2026 may bring some changes that will encourage those who preferred the old regime to switch to the new regime. However, the old system is unlikely to be abolished completely.

Currently, 18% GST is levied on health insurance premiums, making insurance very expensive. In Budget 2026, the government may reduce this tax rate to 5% for senior citizens or abolish it altogether.