Union Budget 2026 Expectations Middle Class Seeks Tax Relief And Housing Reforms
Union Budget 2026: As India heads towards Union Budget 2026, the expectations of the middle class are centered not on lavish giveaways, but on stability and the protection of purchasing power. The overarching sentiment among salaried individuals and self-employed families is a need for tangible relief from the rising cost of living, which covers essentials like housing, healthcare, and education.
While economic data suggests that headline inflation has moderated, the ground reality for households is different. The costs of core necessities—including food, fuel, LPG, and utilities—have risen sharply, often outpacing income growth in urban centers. This disparity has forced many families to cut back on discretionary spending and, alarmingly, dip into their savings to meet daily expenses. Consequently, there is a strong demand for fiscal measures that directly boost disposable income.
Expectations on Taxation and Rebates
Although previous adjustments to the tax-free threshold under the new regime (for incomes above ₹12 lakh) provided some relief, taxpayers are looking for more comprehensive reforms this year. Key demands include:
- Rationalizing the 30% Slab: There is a widespread call to revise the income threshold for the peak 30% tax bracket to reduce the burden on the salaried class.
- Expanding Section 87A: Increasing the rebate limits to cover a larger section of taxpayers.
- Enhancing Deductions: Higher deductions for savings and investments are sought to encourage financial security.
- Experts also emphasize the need for a simpler compliance process, faster tax refunds, and a clearer transition path between the old and new tax regimes to improve the overall taxpayer experience.
The Affordable Housing Dilemma
Housing remains a critical area of concern. Industry bodies and homebuyers argue that the government’s current definition of “affordable housing”—capped at ₹45 lakh—is outdated. In major metro cities, finding a basic habitable apartment within this limit is nearly impossible.
To address this, stakeholders are urging the government to:
- Revise the price threshold for affordable housing to ₹75–95 lakh in major cities.
- Increase tax deductions on home loan interest to incentivize buying.
- Provide renewed momentum to schemes like PMAY-U 2.0 to support the urban poor and middle class.
Aligning tax incentives and GST rates with current market realities is seen as essential to reviving the supply of affordable and rental housing. Ultimately, the middle class is not seeking flashy announcements but a balanced budget that translates macroeconomic growth into day-to-day financial relief.
