Budget 2026 Expectations for Taxpayers and Businesses

Have you caught yourself scrolling through Twitter or chatting with colleagues about the upcoming Budget 2026? You’re not alone. With the Union Budget set to be unveiled on February 1, the buzz is everywhere. As an Indian taxpayer or business owner, you might be wondering; will there be anything that benefits in this Budget? 

In this post, we’ll walk you through the key Budget 2026 expectations from income tax slab changes to GST reforms, and MSME support. By the end, you’ll have a clearer idea of what may be coming (and how it could affect you). So, grab a cup of tea and let’s dive in!

Why This Budget Feels Personal

Think back to last year. Tax slabs shifted, standard deductions rose. Now, whispers say more relief is coming your way. India aims to achieve Viksit Bharat by 2047 - a developed nation. Budget 2026 could speed that up with smart spending on growth.

Right now, in late January 2026, job numbers look bright. The Economic Survey notes 8.7 lakh new jobs in recent months, with unemployment steady at 5%. Rural demand picks up, cars sell well, thanks to strong private spending. Yet global worries, such as US tariffs, remain. 

Income Tax Expectations for Budget 2026

The government has already provided some historic concessions in the last two years and adjusted the tax slabs in such a way that the income of up to ₹12.75 lakh was almost tax-free in the new regime. Due to such changes in the recent past, several experts believe that there are unlikely to be any drastic changes this year. 

Nevertheless, there is still hope. 

The following are income tax changes are likely to be announced in Budget 2026: 

Higher Basic Exemption Limit 

There may also be an increase in standard deductions from ₹75,000 to ₹100,000 to enable people to cover the increasing costs of living. Suppose you and your family could make a little more before you reach the tax bracket, that would be a great relief, wouldn't it? 

Home Loan Interest Deduction

Home loan interest is another pain point that is being discussed in social media. When you pay EMI for a housing loan, up to ₹2 lakh is eligible for tax deduction. Experts believe that this limit should be raised to compensate for the increasing real estate prices. 

Simpler Capital Gains Rules

Simplification and reduction in Long Term Capital Gains is also expected in this Budget. 

Expectations on GST Front for Budget 2026

As a business owner, you must be aware of the fact that GST compliance is a painstaking process. From filing multiple return forms to generating e-way bills and e-invoices, the process is time-consuming. Thus, industry leaders are demanding GST simplification and lessening the compliance load. 

The following are steps government may announce to make GST compliance simpler: 

Expanding the Horizon of Inverted Duty Structure

An inverted duty structure occurs when the GST on raw materials is higher than that on the finished product resulting in accumulated input tax credits (ITC) which the business is unable to utilize completely. In Budget 2026, refunds provision may be expanded to resolve the issue of under-utilization of ITC. 

Provision for Post-Sale Discount 

Under current GST rules and regulations, there are almost no provisions for post-sale-discount. As per the existing rules, the discount should be deducted from a transaction value and must be agreed upfront at the time of closing the deal. This is impractical for several industries. It is expected that Budget 2026 may chalk-out the provision for post-sales discount. 

Removing Refund Threshold for Exporters 

Another area to keep an eye on is GST refunds. The small exporters have an issue with a rule that prohibits them from claiming refunds below a specified threshold. Industry leaders are demanding that this rule be removed to improve business liquidity.

MSMEs’ Expectations from Budget 2026

MSMEs and startups are the backbone of India’s economy. They create jobs and share a big chunk in exports. The Budget 2026 is expected to inject optimism by providing easier access to credit. The industry is also expecting the expansion of the PLI scheme among other sectors. 

Closing Notes 

We hope after reading this blog you must be excited for Budget 2026. Whether you are a salaried employee or business owner we hope your expectations get fulfilled so that you can achieve your financial goals. Since the Budget is set to be announced on February 1, 2026, all we can do for now is keep our fingers crossed.

Frequently Asked Questions on Budget 2026

What is the date of the budget for 2026?

The Union Budget 2026 will be presented on Feb 1, 2026. 

What is expected from Budget 2026?

The following are the expectations from Union Budget 2026: 

• Marginal relief in income tax
• Infrastructure development  
• Fiscal consolidation
• Employment generation 
• Simpler compliance 

About the author

Mehul Jagwani

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Mehul is a seasoned content writer with a passion for simplifying complex accounting and GST topics. With a keen interest in entrepreneurship and business management, he specializes in creating informative and engaging content for themunim.com. His goal is to help businesses understand and implement accounting and GST software solutions effectively. When he's not crafting content, Mehul enjoys exploring new places and spending time with his Golden Retriever.