Union Budget 2026, Income Tax news: Old vs new tax regime changes that could reshape middle-class savings

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As Budget 2026 nears, debate intensifies over old versus new tax regimes, with taxpayers seeking simpler rules, fair slabs, and better deductions.

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As Union Budget 2026 approaches, the debate between India’s Old and New Income Tax Regimes is heating up again.

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Salaried and middle-class taxpayers are seeking a balance between higher tax exemptions and a simpler, fairer tax system.

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The old tax regime benefits taxpayers with home loans, insurance policies, and long-term investments through multiple deductions and exemptions.

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Additional benefits include HRA, LTA, home loan interest under Section 24(b), and a standard deduction of around ₹50,000.

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Under Section 115BAC, the new tax regime offers lower tax rates but removes most deductions like 80C, 80D, HRA, and LTA.

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Tax relief is mostly limited to a standard deduction of up to ₹75,000, employer NPS contribution, and select retirement-related exemptions.

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Experts suggest raising the 30% tax slab, simplifying rates, and linking slabs to inflation to reduce long-term tax burden.