Budget 2026: Senior Citizens Could See Healthcare and Interest Income Relief, Expert Suggests
Senior citizens may emerge as key beneficiaries in the upcoming Union Budget 2026, with potential healthcare-related deductions and relief on interest income. Tarun Garg, Executive Director at Deloitte India, shared these insights in a recent interview with ANI on January 18.
Garg believes the government could provide additional deductions for medical expenses faced by senior citizens. He noted that rising healthcare costs are putting pressure on their budgets, making such relief a likely priority.
Focus on Fine-Tuning, Not Major Overhauls
According to Garg, Budget 2026 is expected to focus on refining the new tax regime rather than introducing sweeping changes. He pointed out that the Centre may not have the fiscal space for large-scale reforms at this time.
"I would call it from an individual tax perspective that the government may want to give some impetus to senior citizens," Garg stated. "Medical expenditures are increasing and they have to put in more on their health budget and healthcare, so maybe some bit of additional deductions may be given to senior citizens."
Potential Areas for Relief
Garg highlighted several specific areas where the budget could offer adjustments:
- Interest Income: He suggested the government might consider higher deductions on interest earned from bank deposits and small savings schemes. Current limits stand at ₹10,000 for non-senior citizens and ₹50,000 for seniors. Increased exemptions could help seniors manage inflation and living costs.
- Standard Deduction: Garg flagged this as an area for possible limited relief. He mentioned the standard deduction under the new tax regime could see an increase of ₹25,000 or more, providing relief to salaried taxpayers without altering tax slab rates.
- Provident Fund: For the new tax regime, Garg proposed making provident fund contributions employer-driven. This structural approach could bridge gaps between old and new regimes without adding compliance burdens.
Cautious Outlook on Tax Rates
On the topic of income tax rate rationalization, Garg struck a cautious note. He does not anticipate significant changes to slab rates under the new regime. However, he mentioned the possibility of "certain tweaks" on surcharges, potentially reducing them by one or two percent to address inflationary pressures.
"There are demands that maybe one or two percent surcharge may be reduced, but whether that will see the light of the day is something one has to wait for February 1," he added.
Digitization Easing Compliance
Garg also pointed to improvements in tax compliance through digitization. Tools like the Annual Information Statement (AIS) and Tax Information Statement (TIS) have simplified return filing by pre-filling 50-60% of information for taxpayers.
He cautioned, however, that individuals must verify the accuracy of these pre-filled details to avoid errors or double taxation.
Overall, Garg expects Budget 2026 to prioritize targeted relief and administrative ease over broad personal tax reforms. The Union Budget for 2026-27 will be presented in Parliament on February 1 by Finance Minister Nirmala Sitharaman.
