Ahead of Budget 2026, Finance Minister Nirmala Sitharaman’s past budgets delivered tax relief up to ₹12.75 lakh for salaried individuals, introduced a simplified tax regime exempting incomes up to ₹7.75 lakh, and overhauled capital gains taxes on both short-and long-term gains.
Finance Minister Nirmala Sitharaman will present her ninth Union Budget on 1 February 2026. Over the past five years, she has reshaped India’s tax landscape by making the new regime the default, raising effective tax-free thresholds, overhauling capital gains rules, and introducing crypto taxation.
For the salaried class, the biggest anticipation around Budget Day remains one key announcement – changes to income tax.
During her tenure, Sitharaman introduced various tax reforms, including exemptions for lower-income brackets and revisions to capital gains tax. Budget 2023 made the new tax regime the default to simplify the filing process for taxpayers.
Ahead of Budget 2026, here’s a look at key reforms of the past five years.
Earlier, Budget 2023 unveiled a simplified tax regime exempting taxpayers earning up to ₹7 lakh annually. With the standard deduction of ₹50,000, salaried individuals with incomes up to ₹7.5 lakh paid no tax under the new tax regime.
The short-term capital gains (STCG) rate on certain financial assets was increased from 15% to 20%.
Before Budget 2024, long-term capital gains (LTCG) on equities exceeding ₹1 lakh were taxed at 10%. However, LTCG from properties and select non-equity assets, such as property and debt mutual funds, faced a 20% tax with indexation benefit. This benefit significantly reduced tax liability by adjusting gains against inflation-adjusted costs.
Budget 2024 made LTCG uniform at 12.5% across all asset classes, removed indexation, and raised the exemption limit to ₹1.25 lakh.
The Budget 2024 also redefined the holding period for various capital assets to qualify for LTCG and STCG. It established only two holding period thresholds: 12 months or one year for listed assets such as shares, listed bonds and equities, and 24 months or two years for other assets, including real estate and gold.
Budget 2023 made the new tax regime the default, requiring all taxpayers to file under it unless they opted for the old regime.
Budget 2024 introduced a new tax slab for those following the new tax regime. No tax up to ₹3 lakh; 5% tax between ₹3-7 lakh; and 10% tax between ₹7-10 lakh.
