Budget 2026: Standard Deduction Hike Expected, Tax Relief for Salaried & Middle Class

• Budget 2026 may significantly increase the Standard Deduction for salaried and middle-class individuals, with expectations of a hike from ₹75,000 to ₹1-1.25 lakh in the New Tax Regime.
• The current Standard Deduction is ₹50,000 in the Old Regime (with other exemptions) and ₹75,000 in the New Regime (with limited other exemptions).
• The anticipated hike is driven by rising cost of living, weakened consumption, and continuous demands for tax relief from the middle class, with brokerage houses like Motilal Oswal and Upstox also suggesting this.
• Section 87A rebate might be increased, making income up to ₹12 lakh tax-free in the New Regime, significantly benefiting the middle class and enhancing the regime's popularity.
• Pensioners could also benefit from the increased Standard Deduction, reducing their taxable pension income and overall tax burden.

Why It Matters: Budget 2026 is expected to offer significant tax relief to salaried and middle-class individuals through increased Standard Deduction and Section 87A rebate.