As the Union Budget 2026 approaches, expectations from investors, taxpayers, and financial services leaders are converging around a common theme: clarity, stability, and predictability in taxation and policy. Rather than sweeping tax cuts or headline-grabbing giveaways, experts believe the government is more likely to adopt a calibrated approach that balances fiscal discipline with targeted reforms to support consumption, investment, and long-term financial security.
Market participants expect the government to stay committed to its fiscal consolidation path, even as it continues to use public spending to support growth. According to Pranav Haridasan, Managing Director and CEO, Axis Securities, the Budget is likely to prioritise infrastructure expansion to reduce logistics costs by 4 to 6 per cent of GDP over the next few years. However, he does not foresee unchecked capital expenditure, given the importance of keeping the fiscal deficit within the projected band. Instead, the focus is expected to be on efficiency-driven growth rather than aggressive spending.
Tax Simplification Over Tax Cuts
On the taxation front, expectations are firmly centred on simplification rather than outright rate reductions. Rationalising capital gains tax to reduce complexity and improve compliance is emerging as a key ask from the investment community. While there has been speculation around a possible cut in the Securities Transaction Tax, Haridasan believes this is unlikely given the government’s revenue priorities. Instead, targeted relief for individual taxpayers—such as higher deductions under Section 80C or fine-tuning the new tax regime—could be used to support household consumption.
This sentiment is echoed by Shubham Gupta, CFA and Co-founder, Growthvine Capital, who highlights the need for a fairer and more predictable direct tax framework to boost savings and consumption. He also points to the importance of continued GST simplification to reduce friction for businesses, arguing that stable and accountable fiscal structures are essential to restoring investor confidence. Gupta cautions against any further increase in capital gains tax rates and calls for a review of STT, suggesting it may have outlived its original purpose.
Taking a more citizen-centric view, Founder CommsCredible and Strategic Investor Aman Dhall frames the debate around how taxation feels in everyday life. He argues that while India is not a high-tax country by global standards, the experience of taxation feels heavy because it is fragmented across income tax, GST, cess, surcharges, and duties. According to Dhall, the real issue is not paying less tax, but paying tax more transparently. A simpler, more explainable tax framework—focused on what citizens actually retain for spending, saving, and investing—could improve compliance, trust, and economic participation.
New Tax Regime Tweaks And Family-focused Relief
Several experts believe that refining the new tax regime will be a critical Budget lever. Prashant Mishra, Founder and CEO, Agnam Advisors, suggests integrating key deductions—such as housing loan interest and medical insurance—into the new regime to ease compliance and provide equitable relief amid rising living costs. He also proposes a new 25 per cent slab for individuals earning between Rs 30–50 Lakh, alongside higher allowances for elderly care and childcare, reflecting India’s changing demographics.
Mishra also highlights the importance of strengthening retirement savings incentives, rationalising surcharges, and clarifying rules around family office structures and LLP reorganisations. Such measures, he argues, could help channel private capital into productive investments while reinforcing India’s appeal as a wealth management hub.
Retirement Preparedness And Ageing India
With India’s population ageing rapidly, retirement planning is becoming a central Budget theme. Vishwajeet Goel, Head, Pensionbazaar.com, notes that over 14 Crore Indians are already above the age of 60, a number expected to nearly double by 2047. Against this backdrop, he sees a strong case for expanding tax incentives for the National Pension System under the new tax regime, covering both salaried and self-employed individuals.
Goel also points to the need for greater flexibility in employer-linked NPS contributions, arguing that delinking employer participation from employee tax benefits could bring more of the formal workforce into long-term pension savings. Over time, such reforms could align India’s pension framework more closely with global best practices.
Fintech, Credit And Inclusion
Beyond taxes, the Budget is also expected to address the evolving credit and fintech ecosystem. Rohit Garg, Founder and CEO, Olyv, stresses the importance of clear and consistent policy frameworks for digital lending, alongside stronger data infrastructure and financial literacy. In his view, a Budget that encourages collaboration between fintechs and regulated lenders—while keeping consumer protection at the core—will be crucial for building trust in formal credit systems.
At the grassroots level, inclusive growth remains a key expectation. Aditi Singh, Chief Strategy Officer, Satin Creditcare Network, underlines the need for sustained focus on rural livelihoods, women entrepreneurship, and MSME resilience. She believes higher support for credit-linked social security programmes, faster transmission of policy rate changes, and continued emphasis on housing and clean energy can help deepen last-mile economic participation, especially in semi-urban and rural regions.
Taken together, expectations from Budget 2026 suggest a shift away from short-term stimulus toward structural reform. For taxpayers, investors, and financial services players alike, the emphasis is clear: simplify the system, make it predictable, and allow households and businesses to plan with confidence. |
