Higher Standard Deduction, Reworking of Income Tax Slab Structure Likely

HIGHER STANDARD DEDUCTION, REWORKING OF INCOME TAX SLAB STRUCTURE LIKELY

- Gireesh Chandra Prasad

NEW DELHI: Finance minister Nirmala Sitharaman is likely to offer income tax breaks for individuals in the Union budget for FY26 as part of efforts to boost household spending and stimulate economic growth, two persons informed about discussions in the government said.

While the exact changes to the new personal income tax regime will be finalized over the next few days, discussions are currently on to increase the standard deduction for individuals, which was last revised to ₹75,000 in the July 2024 budget, further raise the basic tax exemption limit from ₹3 lakh, and to rework the tax structure for personal income up to ₹12-15 lakh, one of the persons quoted above said.

This will require reworking the 20% tax slab, in which currently those with ₹12-15 lakh income fall, the lower ones and adopt any consequential changes, the person said, adding that this revamp of the new personal I-T structure is expected to benefit everyone opting for it.