After the sweeping tax reforms of 2025, including the overhaul of the new income tax regime, the introduction of the New Income Tax Act, and rationalisation of GST rates, the focus now shifts to whether the government will continue nudging taxpayers toward the new regime with more incentives.
As always, taxpayers look to the government to tweak tax slabs and put more money in their hands. Based on past trends, any changes in Budget 2026 are likely to focus primarily on the new income tax regime.
Will Budget 2026 bring further incentives?
Experts are largely cautious about expecting major changes this year.
“Since the Government has already made major improvements to the new income tax regime in Budget 2025, big changes to tax slabs are unlikely in this year's Budget,” Preeti Sharma, Partner at BDO India, told Times of India Online.
Similarly, Surabhi Marwah of EY India told Times of India Online that the focus now is likely on “stability and a smooth transition rather than additional reforms.”
Still, there’s consensus that incremental measures could enhance the new regime’s appeal, especially for middle-class taxpayers who continue to find value in the old regime due to deductions.
Looking ahead
With simplification, higher exemptions, and growing taxpayer adoption, the new income tax regime has clearly taken centre stage. Budget 2026 may not bring radical changes, but selective measures, particularly for middle-class and salaried taxpayers, could further sweeten the deal.
As Sitharaman prepares to unveil Budget 2026 on February 1, taxpayers will be watching closely, hoping for tweaks that translate into more take-home income without complicating an already simplified system.
