The Union Budget 2026 has brought a series of tax and investment-related changes that directly impact India’s middle-class taxpayers. While the government has focused on fiscal consolidation and long-term economic stability, several provisions announced in the Budget are expected to increase the financial burden on salaried individuals, small investors, and households.

From higher taxes on certain investments to changes in deductions and compliance norms, these measures may affect disposable income and savings decisions for millions of taxpayers. In this article, we take a closer look at seven key changes in Budget 2026 that are likely to influence the financial planning of the middle class in the coming year.

The analysis below is based on announcements made in the Union Budget 2026 and official government disclosures.

At a Glance

• Trading: F&O tax rose by up to 150%.

• Gold: Secondary gold bonds now face capital gains tax.

• Date: Most changes start on April 1, 2026.

Trading Costs: The F&O Tax Hike

The state wants to cool down risky stock bets. Therefore, the Securities Transaction Tax (STT) on futures went up. It moved from 0.02% to 0.05%. Specifically, the tax on options rose to 0.15%. This hike makes frequent trading much more expensive. Retail users will feel the pinch on every trade. Use a low-cost broker to save money.

Gold Bonds: No More Free Gains

Sovereign Gold Bonds (SGBs) used to be tax-free at maturity. Actually, that rule changed for bonds bought on the exchange. You only get tax-free gains if you buy directly from the state. Bonds from the secondary market now face a 12.5% tax. Finally, this removes a popular way to save tax. Investors should check their bond source. Direct buying is now the best path.

Pension Cuts: The Disability Shift

The 2026 Budget limits tax breaks for defense personnel. Specifically, disability pensions for retired staff are now taxable. Only those forced out by injury keep the break. Actually, staff who retire after full service must pay tax now. This move aims to stop the misuse of the law. It hits veterans who count on every rupee. Military families must review their tax plans.

Buybacks and Alcohol: Higher Upfront Fees

Share buybacks are now taxed like a sale of stock. Therefore, promoters pay up to 30% tax on these deals. The state also hiked the tax on liquor sales. In fact, the tax at source moved from 1% to 2%. This means distributors and shops pay more upfront. Finally, drinkers will see higher prices at the bar. Both stock and sin goods cost more now.

Investor Blow: Interest Deduction Ends

Investors often borrow money to buy mutual funds or stocks. Specifically, you could once use interest costs to lower your tax. Budget 2026 ends this specific deduction. Actually, you cannot use interest to offset dividend income anymore. This makes “leveraged” investing much less attractive. Small investors must use their own cash now. Post-tax returns will drop for many.

Coffee Tax: The Machine Duty Hike

Even your morning caffeine fix is at risk. Specifically, the state removed duty breaks on coffee machines. Basic customs duty on these machines is now 10%. Therefore, office cafes and shops face higher equipment costs. Most firms will pass this cost to the customer. Actually, your daily cup could cost a few rupees more. Small luxuies are getting dearer.

Human Insight: The Reality Check

Don’t bank on “long-term growth” to fix these immediate pains. The state claims these hikes stop “speculation,” but they mostly hurt small retail traders. Actually, big funds have ways to hedge these costs that you do not. Reality Check: The coffee machine tax seems small, but it shows the state is hunting for revenue everywhere. Finally, promoters will likely stop buybacks and keep the cash. This could hurt the stock price for normal owners. Be wary of “simplified” tax acts.

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Income Tax Slabs: If you are going to file ITR for the financial year (2023-24) i.e. assessment year 2024-25, then it is very important for you to know whether the new tax regime is better or the old. Today we will tell you 8 benefits of the new tax system, which have been told by our experts CA Ajay Bagadia, CA Santosh Mishra and CA Abhinandan Pandey.

8 benefits of the new tax system

1) Lower tax rates
Tax payers can benefit from lower tax rates in the new tax regime. This will result in lower tax liability and higher disposable income.

CA Ajay Bagadia said that the Modi government is emphasizing on the new tax regime by making it more attractive for taxpayers. The new tax regime offers significantly lower tax rates to taxpayers.

2) Simple tax structure
The new tax regime has made this tax structure extremely simple by offering lower tax rates. The slabs under the new tax regime are as follows.

No tax on income up to Rs 3 lakh.

• Income between Rs 3 lakh to Rs 6 lakh will be taxed at 5 percent (tax exemption available under section 87A)
• Income between Rs 6 lakh and Rs 9 lakh will be taxed at 10 percent (tax exemption is available under Section 87A on income up to Rs 7 lakh).
• Income between Rs 9 lakh and Rs 12 lakh will be taxed at 15 percent.
• There is a provision of 20 percent tax on income between Rs 12 lakh and Rs 15 lakh.
• Income of Rs 15 lakh and above will be taxed at 30 percent.

3) No tax cuts

Under the new system, the need to track and claim tax deductions has been done away with in order to save time and effort for taxpayers.

“Taxpayers do not even have to go through the hassle of collecting and submitting details and evidence for expenses and investments,” says CA Abhinandan Pandey.

4) Basic Exemption Limit

CA Santosh Mishra says, “The basic exemption limit has been increased from ₹2.5 lakh to ₹3 lakh. This increased exemption limit makes the new tax regime more attractive. Note that the highest tax rate i.e. 30% will be imposed on income above Rs 15 lakh.”

5) Change in surcharge rate

With the implementation of the new tax system, the surcharge has reduced from 37% to 25%. This is applicable for individuals with income above Rs 5 crore. This reduced surcharge is valid only for those taxpayers who opt for the new tax regime and whose income is more than ₹5 crore.

6) Change in exemption limit

CA Ajay Bagadia says, “The exemption limit applicable for income up to Rs 5 lakh under the old tax regime is Rs 12,500. However, under the new tax regime if the taxable income is less than or equal to ₹7 lakh, it Exemption limit increased to ₹25,000. Note that Section 87A exemption is applicable under both income tax regimes. Again, the Budget announcement increased the taxable limit from ₹5 lakh to ₹7 lakh.”

7) Standard Deduction

The standard deduction for salaried individuals under both the old and new regimes is ₹50,000.

8) Rebate on leave encashment

Under the new tax regime, you will get exemption on leave encashment. CA Santosh Mishra says, “In Budget 2023, the exemption limit for leave encashment for non-government employees was increased by 8 times i.e. from ₹ 3 lakh to ₹ 25 lakh. Therefore, as per section 10(10AA) on retirement, ₹ Leave encashment up to Rs 25 lakh is tax free.

Other deductions under the new system

Deduction of Rs 15,000 or 1/3 of pension (whichever is less) from family pension income.

Deduction of amount paid or deposited in Agniveer Corpus Fund under section 80CCH(2).

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Income tax slabs have been made for this. At the same time, tax is collected according to the new tax regime and the old tax regime. However, now some people will also have to pay 30 per cent tax. Let’s know about it…

Tax slab

Individual taxpayers have to pay income tax on the basis of the slab system in which they fall. Individuals may fall in a different tax bracket on the basis of their income. As a result, higher income earners will have to pay more tax. The slab system has been implemented to keep the country’s tax system uniform.

Old tax system, whereas at present, for the financial year 2022-23, if someone files income tax under the old tax system and his age is less than 60 years, then he will have to file tax as mentioned below. According to this system, if someone files tax, then he will have to pay more than 30% tax on annual income of more than Rs 10 lakh.

Rs 2.5 lakh per annum income – No tax
Rs 2.5-5 lakh per annum income – 5 per cent tax
Rs 5-10 lakh per annum income – 20 per cent tax
Income above Rs 10 lakh per annum – 30 per cent income tax

In the new tax system , the income tax slabs are different in the new tax system. If someone files income tax return according to the new tax regime, then he will have to pay tax on different incomes according to different slabs. In such a situation, if someone’s income is more than Rs 15 lakh under this system, then they will have to pay 30 percent tax.

Rs 3 lakh annual income – No tax
Rs 3-6 lakh annual income – 5% tax
Rs 6-9 lakh annual income – 10% tax
Rs 9-12 lakh annual income – 15% tax
Rs 12-15 lakh annual income – 20% tax
Income above Rs 15 lakh per annum – 30% tax

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At the same time, it is also being said that no tax will have to be paid on the income of Rs 7 lakh. In such a situation, if you are also not able to understand this hassle of tax, then today we will tell you in very simple words, how the income of 7 lakh 50 thousand rupees can be made tax free.

Not filling salaried class No tax up to Rs 7.50

Under the new tax regime, no tax is going to be levied on an annual income of ₹ 7.5 lakh. This claim has been made by Clear’s MD and CEO Archit Gupta. He says that those who are salaried can avail the standard deduction of ₹50,000. In this way, people having a total income of Rs 7 lakh 50 thousand will not have to pay any tax. Let us tell you that normal tax benefits like HRA, LTA etc. cannot be claimed in the new tax regime.

Exemption increased in new tax regime

For the financial year 2023-24, the government has increased the tax exemption available. Now in the new tax system, income up to Rs 7 lakh has been made tax free under section 87A, that is, now this exemption has been increased to Rs 25 thousand.

Advantage or disadvantage in the old tax system?

People who can invest and are spending in the form of insurance, school fees or home loan. The old tax regime can be beneficial for them. At the same time, both the tax systems have their own advantages and disadvantages. In such a situation, you should choose the new or old regime according to your need.

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However, this benefit will be available only to those opting for the new tax regime. The Finance Minister has raised the income tax exemption limit to Rs 7 lakh in the new tax regime, which was earlier Rs 5 lakh. While under the old tax regime, income up to Rs 2.5 lakh was tax free.

However, in the old tax regime, there is a provision for Standard Deduction and many exemptions in other items. These benefits were not given in the new tax regime. But this time standard deduction has also been included in the new tax system. A taxpayer can claim up to Rs 50,000 for standard deduction, while every salaried individual with an income of Rs 15.5 lakh or more is entitled to Rs 52,500 as standard deduction. Under the new tax regime, the basic exemption limit has been increased to Rs 3 lakh.

What is standard deduction?

Standard deduction is the deduction that is deducted from the income of the income tax payer and after that tax is calculated on the remaining income. Salaried employees and pensioners are already getting the facility to avail tax exemption through standard deduction. Suppose the annual income of a person doing a job is Rs 8 lakh. In such a situation, if the benefit of standard deduction up to Rs 50,000 is available in the total package, then their tax will be calculated on Rs 7,50,000 instead of Rs 8 lakh.

Standard deduction was introduced in the budget of the year 2018. Earlier its limit was Rs 40,000, which was increased to Rs 50,000 the next year. The purpose of starting this is to give more money to the employees by giving them tax exemption.

Who can avail it Standard deduction can be availed by salaried employees and pensioners who have not opted for the new tax rules. There is a provision of lower tax rate in the new rules. Apart from this, pensioners taking pension are also entitled to get this deduction. But standard deduction is not available on family pension. This means that if any of his dependents is taking family pension after the death of an employee, then he is not entitled to this deduction or exemption.

No effect of change of job

Change of job has no effect on standard deduction exemption. Total salary here includes all the components of salary paid by the employer and all the taxable portion of all allowances and perks. Even if an employee changes his job during the year, he is entitled to get the benefit of standard deduction.

Income tax slabs

The number of income tax slabs has been reduced to 5. Announcing the new tax slab on personal income, Sitharaman said that those earning Rs 3 to 6 lakh annually will have to pay 5% tax. The rate of income tax will be 10% on income of 6 to 9 lakh rupees. Rs 9 lakh to Rs 12 lakh will be taxed at 15%, Rs 12 lakh to Rs 15 lakh at 20% and income above Rs 15 lakh will be taxed at 30%.

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The taxpayers of the salaried class are expecting changes in income tax slabs and reduction in surcharge from the upcoming Union Budget 2023-24. Let us tell you that the budget session will start on January 31 and Finance Minister Nirmala Sitharaman will present the budget on February 1.

1. More tax exemption on investment under 80C

Section 80C is the most important section for saving tax for the employed. Increasing the exemption limit under this section means that more and more people have to get relief. Please tell that at present, the exemption available under Section 80C is Rs 1.5 lakh. It is expected that in Budget 2023, under Section 80C, the government can increase the deduction limit to Rs 200,000 annually.

2. Standard deduction limit expected to be increased The standard

deduction limit for salaried employees under section 16 (ia) of Income Tax is Rs 50000 per annum. In the up
coming budget, it is expected that due to rising inflation, the government will change the provision of section 16 (IA) and increase the standard deduction limit to Rs 75,000 annually.

3. Change in tax

slab According to media reports, 25 percent tax is being demanded on income of more than 20 lakhs in tax slab. Similarly, there is a demand to increase the tax to 20 percent on the income of 10 to 20 lakhs. In the current tax slab, up to Rs 2.5 lakh is not taxed. 2.5 to 5 lakh is 5 percent, from 5 to 7.5 lakh is 20 percent tax. Similarly, 20 percent tax is levied from 7.5 lakh to 10 lakh. In which change has been demanded.

4. Deduction limit expected to increase

From Budget 2023, it is expected that the government may increase the deduction limit under Section 80CCD(1B) from Rs 50,000 to Rs 100,000 annually to encourage investment in retirement plans.

5. There will be a change in the 2 year old tax system

According to media reports, the government is considering increasing the tax exemption limit in the 2 year old tax system. This will give relief to taxpayers and they will have more money for investment.

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At the same time, many people are also saying that the income tax rates and slabs which were applicable in the assessment year 2022-23, can remain applicable in the new assessment year (AY 2023-24) as well.

Let us tell you that at present two tax systems are in force in the country. You can choose any of these according to your convenience. Now it has to be seen what changes will happen next year.

Income Tax Slabs and Rates 2023 (New Regime)

On annual income up to Rs 2.5 lakh: Zero On annual income
up to Rs 2.5-5 lakh: 5% On
annual income up to Rs 5-7.5 lakh: 10%
7.50-10 lakh Annual income up to Rs.15 lakhs: 15%
Annual income up to Rs.10-12.5 lakhs: 20%
Annual income up to Rs.12.5-15 lakhs: 25% Annual income up to Rs.15-20 lakhs
: 30%
20 lakhs On annual income above Rs.: 30%

Income Tax Slabs and Rates 2023 (Old Regime)

On annual income up to Rs 2.5 lakh: Zero On annual income
up to Rs 2.5-5 lakh: 5% On
annual income up to Rs 5-10 lakh: 20%
10-20 lakh Annual income up to Rs. 30%
Annual income above Rs. 20 lakhs: 30%

Changes in income tax rates and slabs expected in Budget 2023

Several tax experts and industry bodies have urged the government to revise income tax rates in certain slabs to provide relief to taxpayers. The tax rate for individuals has not been changed since FY 2017-18 (new tax regime in FY 2020-21). Experts are expecting that to give some relief to the employed taxpayers, the top tax rate of 30 per cent should be reduced to 25 per cent and the top tax limit should be increased from Rs 10 lakh to Rs 20 lakh.

Tapti Ghosh, partner, Deloitte India, expects from the budget:

Income Tax Rates (Old Regime)
Annual income up to Rs 2.5 lakh: Nil Annual income
up to Rs 2.5-5 lakh: 5% Annual income
up to Rs 5-10 lakh: 20%
Annual income up to Rs 10-20 lakh: 20%
Annual income above Rs 20 lakh: 25%

Income Tax Rates 2023 (New Regime)

Annual income up to Rs 2.5 lakh: Nil Annual income
up to Rs 2.5-5 lakh: 5% Annual income up to Rs 5-7.5 lakh
: 10%
Annual income up to Rs 7.50-10 lakh : 15%
Annual income up to Rs 10-12.5 lakhs: 20% Annual income
up to Rs 12.5-15 lakhs: 20% Annual income
up to Rs 15-20 lakhs: 20%
Annual income above Rs 20 lakhs: 25%

The post Income Tax Rate and Slab 2023: What will be the tax rates and slabs for ITR filing in the new year? first appeared on Rightsofemployees.com.

It means the tax rates keep increasing with an increase in the income of the taxpayer. This type of taxation enables progressive and fair tax systems in the country. Such income tax slabs tend to undergo a change during every budget. These slab rates are different for different categories of taxpayers. Income tax has classified three categories of “individual “taxpayers such as:

Individuals (aged less than of 60 years) including residents and non-residents
Resident Senior citizens (60 to 80 years of age)
Resident Super senior citizens (aged more than 80 years)

How To File Income Tax Return In Partially Online And Partially Offline Mode 

In order to file income tax returns through the ITR-1 form in a partially online and partially offline mode, the taxpayer needs to download the pre-filled JASON file and use the JSON utility to fill in one’s income details for FY22. After this, the taxpayer needs to upload the filled JASON form on the income tax e-filing portal  – incometax.gov.in – to complete the ITR filing process.

The post Income Tax Slabs: New Income Tax Slabs For Financial Year 2021-22 And Assessment Year 2022-23 first appeared on Rightsofemployees.com.

It means the tax rates keep increasing with an increase in the income of the taxpayer. This type of taxation enables progressive and fair tax systems in the country. Such income tax slabs tend to undergo a change during every budget. These slab rates are different for different categories of taxpayers. Income tax has classified three categories of “individual “taxpayers such as:

Individuals (aged less than of 60 years) including residents and non-residents
Resident Senior citizens (60 to 80 years of age)
Resident Super senior citizens (aged more than 80 years)

How To File Income Tax Return In Partially Online And Partially Offline Mode 

In order to file income tax returns through the ITR-1 form in a partially online and partially offline mode, the taxpayer needs to download the pre-filled JASON file and use the JSON utility to fill in one’s income details for FY22. After this, the taxpayer needs to upload the filled JASON form on the income tax e-filing portal  – incometax.gov.in – to complete the ITR filing process.

The post New Income Tax Slabs: Latest income tax slab rates for Financial Year 2021-22 and 2022-23 first appeared on Rightsofemployees.com.

It means the tax rates keep increasing with an increase in the income of the taxpayer. This type of taxation enables progressive and fair tax systems in the country. Such income tax slabs tend to undergo a change during every budget. These slab rates are different for different categories of taxpayers. Income tax has classified three categories of “individual “taxpayers such as:

Individuals (aged less than of 60 years) including residents and non-residents
Resident Senior citizens (60 to 80 years of age)
Resident Super senior citizens (aged more than 80 years)

How To File Income Tax Return In Partially Online And Partially Offline Mode 

In order to file income tax returns through the ITR-1 form in a partially online and partially offline mode, the taxpayer needs to download the pre-filled JASON file and use the JSON utility to fill in one’s income details for FY22. After this, the taxpayer needs to upload the filled JASON form on the income tax e-filing portal  – incometax.gov.in – to complete the ITR filing process.

The post Income Tax Slabs: New Income Tax Slabs For Financial Year 2021-22 And Assessment Year 2022-23 first appeared on Rightsofemployees.com.

It means the tax rates keep increasing with an increase in the income of the taxpayer. This type of taxation enables progressive and fair tax systems in the country. Such income tax slabs tend to undergo a change during every budget. These slab rates are different for different categories of taxpayers. Income tax has classified three categories of “individual “taxpayers such as:

Individuals (aged less than of 60 years) including residents and non-residents
Resident Senior citizens (60 to 80 years of age)
Resident Super senior citizens (aged more than 80 years)

How To File Income Tax Return In Partially Online And Partially Offline Mode 

In order to file income tax returns through the ITR-1 form in a partially online and partially offline mode, the taxpayer needs to download the pre-filled JASON file and use the JSON utility to fill in one’s income details for FY22. After this, the taxpayer needs to upload the filled JASON form on the income tax e-filing portal  – incometax.gov.in – to complete the ITR filing process.

The post Income Tax Slabs: New Income Tax Slabs For Financial Year 2021-22 And Assessment Year 2022-23 first appeared on Rightsofemployees.com.