Budget 2026: The world of taxes has completely changed since Nirmala Sitharaman's first budget, filling the pockets of the middle class like this!
Finance Minister Nirmala Sitharaman will present her ninth budget on February 1, 2026. Since her first budget, the tax system has undergone a complete overhaul. Home loan interest exemptions were increased, and a new tax regime became the default. The biggest relief came in 2025, when income up to ₹12 lakh was made tax-free. These changes have significantly reduced the burden on the common man.
Budget 2026: Finance Minister Nirmala Sitharaman will present the country's general budget on February 1, 2026. This will be her ninth Union Budget. Looking back, we see that since her first budget on July 5, 2019, she has completely transformed the tax landscape.
Over the past few years, the government has focused not only on boosting the economy but also on reducing the tax burden on the common man. Let's explore how the Finance Minister's decisions over the past seven years have impacted the lives of ordinary taxpayers.
First major relief for affordable housing
Nirmala Sitharaman began her tenure with significant relief for the middle class. When she presented her first budget in 2019, her focus was on affordable housing.
A major announcement was made for homebuyers at the time. The government announced an additional deduction of ₹1.5 lakh on interest paid on home loans approved until March 31, 2020.
The direct effect of this was that the total home loan interest deduction increased to ₹3.5 lakh. This move not only revitalized the real estate sector but also encouraged homebuyers who had been hesitant due to tax burdens and interest rates.
The biggest U-turn in the tax system
The 2020 budget was historic, as it coincided with the coronavirus pandemic gripping the world. In this budget, the Finance Minister offered taxpayers the option of a "new tax regime." This system featured lower tax rates but lacked the deductions and exemptions offered by the old system.
Initially, people showed little interest, but the government didn't give up. In the 2023 budget, a major decision was made to make the new regime the "default regime." This means that if you don't choose the old system yourself, you will automatically be placed under the new system.
Government's eye on technology and crypto
Not only tax rates, but the very process of tax filing has also undergone a complete overhaul. The 2021 Budget introduced "faceless assessment" and "faceless appeal." This eliminated face-to-face contact between tax officials and taxpayers, increasing transparency and public trust in the system.
Subsequently, in 2022, the government launched a major crackdown on digital assets. A direct 30% tax was imposed on profits from cryptocurrencies and virtual digital assets. While the high tax rate certainly shocked investors, the biggest benefit was that crypto transactions now came under legal scrutiny and government scrutiny.
When income of Rs 12 lakh became tax-free
The most encouraging news for taxpayers in recent years came in the 2024 and 2025 budgets. The 2024 full budget attempted to simplify capital gains tax. A 20% tax rate was set for short-term capital gains and a 12.5% tax rate for long-term capital gains, providing clarity for investors.
But the real breakthrough came in Budget 2025. Finance Minister Nirmala Sitharaman gave the salaried class its biggest gift yet by making annual incomes up to ₹12 lakh tax-free.
The standard deduction and new slab calculations ensured that individuals would not be required to pay taxes even on incomes up to ₹12.75 lakh. It will be interesting to see how the Finance Minister continues this trend in Budget 2026.