Budget 2026: Preparations for Budget 2026-27 have begun in full swing. Finance Minister Nirmala Sitharaman will present it in Parliament on February 1, 2026. Industry body PHDCCI has urged the government to reform the personal income tax by raising the highest 30% tax threshold. They suggest that this should only apply to those earning more than ₹50 lakh.
Proposal to Raise the Upper 30% Tax Threshold
PHDCCI argues that this change in tax rates will only apply to the higher income group. This will provide relief to the middle class and increase their purchasing power. Industry also points out that lowering tax rates will benefit taxpayers and improve government tax collection. This move could provide benefits similar to previous corporate tax reliefs.
Previous Budget and New Tax System
Last year, in the 2025-26 Budget, the government made major reforms to the personal tax system. Under the new tax regime, annual income up to ₹12.75 lakh was declared tax-free. Tax slabs were revised and exemptions were increased. This reform improved the savings and investment capabilities of the middle class and also improved tax compliance.
Union Minister for Finance & Corporate Affairs Smt. @nsitharaman chairs the second Pre-Budget Consultation meeting with representatives from Farmer Associations and Agriculture Economists ahead of the forthcoming General Budget 2026-27 in New Delhi, today.
— Ministry of Finance (@FinMinIndia) November 10, 2025
The #PreBudget… pic.twitter.com/Tqegqc7TkP
Expectations for the Upcoming Budget
Expectations for relief for the middle class are high in the upcoming budget. If the highest tax rate limit is raised, it will ease taxpayers’ financial burden. This will increase their savings and investment capabilities, leading to improved lifestyles. This will also enhance the economic security and financial stability of the common man.
| Feature | Details |
|---|---|
| Article Topic | Budget 2026: Proposed Changes in Income Tax Slabs |
| Industry Proposal | Highest 30% tax rate to apply above Rs 50 lakh instead of Rs 24 lakh |
| Target Audience | Middle-class taxpayers, individual taxpayers, business community |
| Key Objective | Reduce tax burden on middle-class, improve compliance, boost revenues |
| Current Regime | New Tax Regime: Tax-free income up to Rs 12.75 lakh, revised slabs and rebate |
| Finance Minister | Nirmala Sitharaman |
| Budget Presentation Date | February 1, 2026 |
| Expected Benefit | Increased disposable income, personal tax relief |
| Economic Impact | Stimulates consumption, encourages compliance, supports overall economic growth |
| Source | PHDCCI recommendations and Union Budget 2025-26 observations |
Expert Suggestions and Economic Impact
Experts say that this reform will help improve both tax slabs and tax compliance. For the middle class, this move will encourage their annual savings and investments. The government will strive to ensure that this financial reform benefits the wider public and makes the tax system more transparent, simple, and equitable.
Economic Growth and Investment Attraction
This change will also strengthen India’s economic growth and investment attractiveness. Higher income groups will be taxed fairly, while the income and spending capacity of the middle class will increase. The budget aims to provide direct relief to taxpayers and increase their purchasing power through this move.
Like every year, the government will be focused on the expectations of industry and taxpayers. PHDCCI’s proposal to impose a 30% tax rate only on those earning more than ₹50 lakh could provide significant relief to the middle class. This will reduce financial burden and improve the tax system.
FAQs
Q1: What is the proposed change in the highest income tax rate?
A1: 30% tax rate may apply only above Rs 50 lakh income.
Q2: Who suggested revising the income tax slabs?
A2: Industry body PHDCCI suggested the revision for middle-class relief.
Q3: When will the Budget 2026 be presented?
A3: Finance Minister will present it on February 1, 2026.
Q4: What is the current highest income tax slab under the new regime?
A4: Currently, 30% tax applies on income above Rs 24 lakh.
Q5: How will this change benefit taxpayers?
A5: It will reduce tax burden and increase disposable income.
Disclaimer: This article is for informational and educational purposes only. Please consult a financial expert before making any investment or tax-related decisions.
