As grocery bills spiral and the rupee stutters, the middle class pins its last shred of hope on a simple number: one lakh.
Every February, a peculiar ritual unfolds in Indian living rooms - the silent, desperate calculation of "take-home" pay. This year, the collective gaze is fixed on the standard deduction. Currently sitting at ₹75,000, there’s a deafening roar from the salaried trenches demanding it jump to ₹1,00,000 in Budget 2026. It’s not just about greed; it’s about survival in an economy where medical inflation is currently clocking in at a staggering 14%.
The One-Lakh Math
Will the Finance Minister, Nirmala Sitharaman, pull the trigger? Perhaps. If she does, the math changes significantly for the "default" New Tax Regime, which now houses over 72% of the country’s taxpayers. A hike to ₹1 lakh would effectively push the tax-free income ceiling from ₹12.75 lakh to a clean ₹13 lakh. For those in the 30% tax bracket - the folks earning above ₹24 lakh - this shift translates to a tangible saving of about ₹7,800, cess included.
I believe the government realizes that the 2025 reforms, while landmark, were just a starting point. To truly spur discretionary spending - you know, the kind of shopping that keeps the wheels of industry turning - people need to actually see more cash in their bank accounts. A ₹25,000 bump in the deduction is the lowest-hanging fruit for a government that loves "stability over disruption".
Beyond the Deduction
But is the deduction enough? Not really. The "wishlist" is longer than a child’s letter to Santa. Experts are flagging the 30% tax threshold as a major pressure point; in India, you hit that peak rate much earlier than in global peer economies. There’s also a desperate plea to hike the Section 80D health insurance limits to reflect the reality of modern hospital bills.
The "Wait-and-Watch" Risk
Of course, there’s always the chance that the FM decides to play it safe. Given the massive relief provided just last year, some analysts suggest a "wait-and-watch" approach might be on the cards. But with the rupee hitting new lows and global uncertainty lingering, doing nothing might be the riskiest move of all.
Honestly, I reckon the middle class is tired of being the economy’s shock absorber. We need a budget that doesn't just manage the deficit but actually rewards the honest taxpayer. Whether it’s through home loan interest relief or a surcharge rationalization - which currently caps the effective tax rate at a painful 42.7% - something has to give.
On February 1, at 11 AM, we’ll see if the government is finally ready to listen to the whispers of the working class.
