Big expectations from salaried middle class and high earners! As Union Budget 2026 approaches on February 1, 2026, industry bodies like PHDCCI are demanding major changes in new tax regime slabs. Strong pitch: Highest 30% tax rate should apply only on income above ₹50 lakh instead of current ₹24 lakh. This could give huge relief to upper middle class, increase take-home salary and boost spending.
After big relief in Budget 2025 (tax-free up to ₹12 lakh in new regime), taxpayers await more benefits to fight rising costs.
Know Complete Details of Current Income Tax Slabs 2026
Current new tax regime (default for FY 2025-26, applicable till Budget changes):
- Up to ₹4 lakh: 0%
- ₹4-8 lakh: 5%
- ₹8-12 lakh: 10%
- ₹12-16 lakh: 15%
- ₹16-20 lakh: 20%
- ₹20-24 lakh: 25%
- Above ₹24 lakh: 30%
With rebate u/s 87A: No tax up to ₹12 lakh income (₹12.75 lakh for salaried with standard deduction ₹75,000).
Old regime still available with deductions, but 30% starts above ₹10 lakh.
Budget 2026 Expectations: Will 30% Rate Shift to Above ₹50 Lakh?
Industry demands strong relief:
- PHDCCI proposal:
- Up to ₹30 lakh: Max 20%
- ₹30-50 lakh: 25%
- Above ₹50 lakh: 30%
- Other suggestions: Raise 30% threshold to ₹35 lakh or ₹50 lakh directly.
- Reduce highest surcharge to 15% for all.
- Increase standard deduction to ₹1 lakh.
Experts say: After 2025 relief, major slab changes unlikely for lower incomes, but focus on upper middle class possible to encourage consumption.
How Much Relief If 30% Rate Above ₹50 Lakh?
Example for ₹40 lakh income (new regime, approximate):
- Current: Tax around ₹7-8 lakh (after cess).
- If 30% only above ₹50 lakh: Tax could drop by ₹2-3 lakh (max 25% on part).
Higher savings for ₹30-60 lakh earners – more disposable income for homes, education, investments.
How It Affects You – Benefits for Salaried & Middle Class
- Upper middle class (₹20-50 lakh): Big tax cut, higher take-home.
- Boost economy: More spending on goods, services.
- Senior citizens: Separate better slabs expected.
- Tip: Stick to new regime if no big deductions; switch only if 80C/ home loan benefits high.
- Edge cases: Surcharge applies above ₹50 lakh currently – reduction could save more for ₹1-2 crore earners.
New Income Tax Act 2025 starts April 2026 – simpler rules, less litigation.
This Budget could make tax system fairer for growing middle class.
What relief do you want in Budget 2026 – higher slabs or more deductions? Comment below and share your views!
Stay updated with us for all latest Budget 2026 news, tax rules and government announcements.