Budget 2026 Expectations: Will Nirmala Sitharaman increase basic exemption, 80C limit in old tax regime? All eyes on Feb 1

India’s semiconductor and electronics manufacturing industry has urged policymakers to ensure timely disbursement of incentives and focus on value creation in the budget for the financial year 2026-27. The sector’s immediate priority is the continuation of the India Semiconductor Mission (ISM) 2.0 and the Design Linked Incentive (DLI) schemes, India Electronics and Semiconductor Association president Ashok Chandak said. The body also wants higher budgetary allocation for projects that have already been approved. (Read More)

There is also a growing need for clear rules on digital assets such as cryptocurrency and foreign income. Under the new tax law, taxpayers are expecting detailed and transparent guidelines on these matters. This time, taxpayers are not just asking for lower taxes. They want a tax system that is simple, easy to understand and reliable. Middle-class and salaried individuals have high expectations from Budget 2026. With a new tax law on the horizon, this Budget is especially important for the common taxpayer.

"As we move towards the Union Budget, there is a clear expectation for measures that can accelerate green lending at scale. The proposed establishment of a dedicated Green Finance Institution (GFI) can be a game-changer, offering credit guarantees, concessional finance, and securitisation support that substantially lower risks and borrowing costs. Along with targeted incentives for EVs, rooftop solar, and industrial decarbonisation, such institutional support can expand the green credit pipeline and help India stay aligned with its 2030 climate ambitions. The next phase of growth will depend on how effectively policy and finance converge to de-risk and scale sustainable investments across sectors." -- Govind Sankaranarayanan, Co-founder & COO, Ecofy

Taxpayers are also seeking simpler rules for capital gains tax. At present, different assets are governed by different rules, which often leads to confusion. Taxpayers want a uniform and easy-to-understand system for shares, mutual funds and property.

In this era of rising inflation, the cost of housing and medical treatment has increased sharply. Taxpayers want certain essential expenses to be given relief even under the new tax system. There is also growing demand to increase the Rs 2 lakh limit on home loan interest and enhance deductions for medical insurance under the old system. For senior citizens, there is an expectation of higher tax relief on interest earned from savings and simpler rules.

People are also expecting greater ease in compliance under the new tax law. For a long time, taxpayers have faced difficulties in filing income tax returns, receiving refunds, and matching TDS. The new law will replace the concept of the assessment year with a tax year and will also reduce the number of rules. It is expected that in Budget 2026, the government may take major steps to speed up refunds and make tax filing simpler.

Taxpayers now expect the government to either significantly improve the old tax regime or introduce a cleaner and simpler income tax structure by combining elements of both systems.

A large section of salaried employees continues to opt for the old regime due to deductions available on provident fund contributions, home loan repayments, school fees and insurance.

Many taxpayers are seeking an increase in the Section 80C deduction limit from Rs 1.5 lakh to Rs 2 lakh to reduce the financial strain of savings, insurance premiums and children's education expenses.

There is also a demand to restructure the tax slabs under the old regime so that the benefits offered are comparable with those available under the new tax system.

Taxpayers following the old income tax regime want the basic exemption limit, currently set at Rs 2.5 lakh, to be increased to provide greater relief.

Industry says costs and procurement gaps are slowing domestic space manufacturing (Read More)

India's cities, grappling with strained infrastructure and uneven service delivery amid rapid population growth, could soon get greater financial and administrative autonomy. Mint has learnt that the Centre is preparing a blueprint aimed at empowering municipal bodies by reducing their dependence on state and central grants while strengthening their own revenue capabilities. Mint reports that the proposed framework, likely to be announced in the upcoming Union Budget, will focus on enabling urban local bodies (ULBs) to generate more resources through mechanisms such as property tax reforms and rationalised user charges. Two government officials involved in drafting the plan told Mint that the goal is to make cities more self-reliant in funding and managing urban services. (Read More)

The National Stock Exchange's potential move to operate on Sunday, February 1, 2026, is contingent on the government's formal confirmation of the Union Budget date. Market participants have been advised to keep track of announcements from both the Centre and the NSE for updates on trading schedules and other preparations ahead of the Budget session.

Finance Minister Nirmala Sitharaman is expected to present the Union Budget for FY 2026-27 on February 1. Ahead of the Budget, the Economic Survey is likely to be released, followed by a briefing by Chief Economic Advisor V. Anantha Nageswaran and senior officials.

In a statement issued on December 8, 2025, the NSE said it was evaluating the feasibility of holding market operations on February 1, 2026, which falls on a Sunday.

Opening markets on a non-trading day for the Budget would be consistent with practices followed in earlier years when the Budget was presented on a weekend or holiday.

The exchange has clarified that a final decision will be taken only after the Centre formally announces the Union Budget schedule. Until then, the proposal remains under review.

The National Stock Exchange (NSE) is considering keeping equity markets open on Sunday, February 1, 2026, if the Union Budget is presented on that day.