Union Budget 2026 May Raise Interest Income Limits and Healthcare Deductions for Seniors, Deloitte Predicts Small Tax Tweaks

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Union Budget 2026 is expected to focus on senior citizen tax relief with simple and practical changes, according to Deloitte India. Experts say the budget will avoid big tax reforms and instead offer small relief measures. Finance Minister Nirmala Sitharaman will present the Union Budget 2026–27 in Parliament on February 1.

Deloitte India Executive Director Tarun Garg said senior citizens may gain the most from this year’s budget. Many retirees face rising costs every month. Medical bills, daily expenses, and fixed incomes create pressure. The government may address these issues through focused tax relief.

Interest Income Relief May Get Priority


One key area is interest income deductions. Senior citizens often depend on bank fixed deposits and savings schemes for regular income. Current tax limits on interest income may increase. This change could help seniors save more money and reduce their tax burden. It may also help them deal with rising prices.

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Healthcare expenses remain a major concern. Deloitte expects the budget to offer higher healthcare deductions for senior citizens. Medical treatment costs keep rising each year. Hospital visits, medicines, and insurance premiums add to the burden. Extra tax relief in this area may help seniors manage healthcare expenses better.

Healthcare Deductions and Small Tax Tweaks Likely


Instead of major changes, the government may introduce tax regime tweaks. The new tax regime already simplified income tax rules in earlier budgets. Experts believe the government will continue improving this system. A higher standard deduction is likely. This step may help salaried people and pensioners without changing tax slabs.

Provident fund rules may also see small updates. Employer provident fund contributions could get better treatment under the new tax regime. This change may make tax filing easier and reduce confusion for taxpayers.

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Limited Scope for Big Reforms This Year


Big changes in tax slab rates are unlikely. Deloitte says limited government funds reduce the scope for large tax cuts. The focus will remain on stability and careful planning rather than bold decisions.

Digital tax systems will continue to grow. Pre-filled income tax returns already include most income details. This system aims to make tax filing simpler and faster. However, experts note that some senior citizens may find digital tools difficult. The government may need to ensure better support for older taxpayers.

For general taxpayers, the budget may offer only small relief. Standard deduction changes may provide some benefit. Large reforms that impact everyone are unlikely this year.

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Overall, the Union Budget 2026 is expected to follow a calm and balanced path. Senior citizens may receive useful support through interest income relief and healthcare deductions. These steps may not change the tax system fully, but they can make daily life easier for many retirees.

The full picture will become clear on Budget Day. For now, expectations remain focused on small changes that offer steady support rather than big tax reforms.