Budget 2026 Date: Check Expectations of Middle-Class Taxpayers As Finance Minister Nirmala Sitharaman To Present Union Budget on February 1, 2026

Mumbai, January 20: As the Union Budget 2026 approaches, middle-class and salaried taxpayers have submitted a high-priority "wishlist" to Finance Minister Nirmala Sitharaman, focusing on simplified compliance and relief from rising costs. The primary demand centers on the introduction of a "One Nation-One ITR" form to replace the existing seven complex categories, aimed at reducing errors and making tax filing more user-friendly.

Beyond simplification, taxpayers are urging the government to use the tax code as a tool to address pressing national issues, such as urban air pollution. The wishlist includes a proposal for specific tax incentives for the purchase of Electric Vehicles (EVs) within the individual tax regime. While the government has recently moved toward a policy of "lower taxes with fewer exemptions," proponents argue that the health emergency caused by pollution justifies a special carve-out to encourage greener consumer choices. Union Budget 2026: What Is Economic Survey and How It Sets the Fiscal Direction.

Union Budget 2026 Expectations

Streamlining the Filing Process

Taxpayers are currently required to navigate multiple ITR forms based on their shifting sources of income, leading to frequent confusion. The proposal for a single, uniform ITR form would allow users to simply select their entity type and income sources, with the system then displaying only the relevant pre-filled schedules.

In addition to a single form, there is a call for a "Master Circular" for the new Act. This would act as a comprehensive guide, linking old regulations to new sections and clearing the clutter of six decades of overlapping notifications. Budget 2026: Joint Tax Filing Proposal May Double Income Tax Exemption for Married Couples to INR 8 Lakh.

Urgent Need for TDS Reforms

The current Tax Deduction at Source (TDS) framework is frequently cited as a major administrative burden. Tax experts are suggesting a "neutral revenue" revamp that merges or deletes sections with insignificant collections while prescribing only two or three standard tax rates.

Another key suggestion is the removal of the requirement to issue physical TDS certificates. Since this data is already captured in the Annual Information Statement (AIS) and Form 26AS, a digital "TDS Ledger" mechanism could significantly reduce litigation and the compliance load on small businesses and salaried individuals.

Incentivising Environmental Change

With several Indian cities consistently topping global pollution charts, the wishlist includes a "multi-pronged" approach to direct tax. Beyond EV incentives for individuals, there is a proposal to allow Corporate Social Responsibility (CSR) spending on pollution control research to be treated as a fully tax-deductible expenditure.

These measures are seen not just as financial relief, but as a way to align individual and corporate interests with the government’s broader environmental and health goals.

As the countdown to the Budget begins, the focus remains on whether the government will balance its goal of a "leakage-free" tax system with the public's desire for a less punishing compliance regime. For the common man, the upcoming announcements will be a litmus test for the government's commitment to making the "New Act" truly simple and taxpayer-friendly.

(The above story first appeared on LatestLY on Jan 20, 2026 10:59 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).