Senior citizens in the spotlight!:Govt may announce more tax relief, health benefits ₹1 lakh standard deduction in Budget 2026, says report

India’s upcoming Union Budget 2026 might bring some welcome financial relief for senior citizens. According to Tarun Garg, a top executive at Deloitte India, the government might increase tax deductions for senior citizens, especially related to interest income and healthcare expenses. Why Senior Citizens? Garg explained that senior citizens are facing rising medical costs and need to spend more on their health. Because of this, the government might offer them extra tax breaks to help ease the financial burden. The Union Budget 2026-27, which is like the government’s financial plan for the year, will be presented on Sunday, 1 February 2026. More Interest Income Deductions? Many people are asking the government to increase the amount of interest income that can be deducted from taxes. Currently, regular citizens can deduct up to ₹10,000, while senior citizens can deduct up to ₹50,000. Garg believes that raising these limits would help senior citizens deal with rising prices and the increasing cost of living. Focus on Fine-Tuning, Not Big Changes Beyond senior citizen-specific measures, the Budget is expected to focus on making small improvements to the new tax system, rather than introducing major changes. Garg noted that the government doesn’t have a lot of extra money available, so they’ll likely focus on targeted adjustments. Provident Fund Changes Possible One potential change could involve employer-driven provident fund contributions. The government might include these deductions in the new tax system. Provident funds are savings plans where employees and employers contribute, and Garg said that including them in the new system could simplify things without adding extra paperwork. Standard Deduction Could Increase Another area where we might see some relief is the standard deduction. This is a fixed amount that everyone can deduct from their income before paying taxes. Garg suggested that the standard deduction under the new tax system could be increased, possibly by ₹25,000 or more. This would help salaried employees without changing the existing tax rates. No Big Changes to Tax Rates Expected Garg doesn’t anticipate any major changes to the tax rates themselves. The existing tax brackets under the new tax system are likely to remain the same. However, there might be some small adjustments to the surcharge (an extra fee on top of the tax), as the government tries to manage inflation. Digitization Making Taxes Easier Garg also highlighted that filing taxes is becoming easier thanks to digitization. The Annual Information Statement (AIS) and Tax Information Statement (TIS) contain a lot of information about taxpayers, and much of this information is pre-filled when filing returns, saving people time. Be Careful When Filing Despite the convenience of pre-filled information, Garg warned taxpayers to double-check that all the details are correct. Mistakes or duplicate entries could lead to the same income being taxed twice. Overall, Targeted Relief and Simplicity In conclusion, Budget 2026 is expected to prioritize targeted tax relief and making the tax system easier to use, rather than making sweeping changes to personal income taxes.