Budget 2026: Big Announcements Expected to Boost New Tax Regime's Appeal

• The government aims to make the new tax regime more attractive, simple, and easy to comply with, positioning it as the default option.
• Changes in Budget 2025 have already benefited the middle class, with Finance Minister Nirmala Sitharaman acknowledging their contribution.
• Direct tax collection increased by 7% and non-corporate tax by 8% in FY 2025-26, indicating a growing contribution from individual taxpayers.
• The new regime offers a higher tax-free limit (up to Rs 12 lakh effectively tax-free with rebate and standard deduction) and simpler, lower tax slabs.
• Choosing between the new and old regimes depends on individual deductions; the new regime is beneficial for those with fewer deductions, while the old regime suits those with significant eligible deductions like 80C, 80D, and HRA.

Why It Matters: Budget 2026 will likely introduce measures to further enhance the new tax regime's attractiveness for taxpayers.