Union Budget 2026 Wishlist: What Middle Class and Salaried Taxpayers Want From FM Sitharaman

Ahead of the Union Budget 2026, Indian taxpayers are calling for a simpler, fairer tax system. Key demands include introducing a single Income Tax Return (ITR) form to reduce complexity and errors.

As the Union Budget 2026 approaches, millions of middle-class families, salaried employees and individual taxpayers are once again looking to Finance Minister Nirmala Sitharaman with a mix of hope and anticipation. For many, Budget day is about more than numbers—it’s about relief from complex rules and a tax system that feels fair and easy to navigate.

While expectations are wide-ranging, a few key demands are dominating conversations this year.

One Income Tax Return Form: A Long-Pending Demand

One of the strongest demands from taxpayers is the introduction of a single Income Tax Return (ITR) form. At present, taxpayers must choose from seven different forms depending on income sources, often leading to confusion and filing errors.

Many believe a common ITR form, where taxpayers simply select their income types and see only relevant sections—would make filing simpler and stress-free. With the new Income Tax law set to come into effect from April 1, 2026, taxpayers feel this could be the ideal time for such a reform.

Clear Rules Under the New Income Tax Law

The New Income Tax Act will replace the existing law that has been in place for more than 60 years. Over the decades, countless circulars and notifications have been issued, making it difficult for taxpayers to know what rules still apply.

Taxpayers are hoping the government issues a master circular clearly listing all valid instructions under the new law, mapped to new section numbers. Updating this document every year could go a long way in reducing confusion and disputes.

TDS Rules Need Simplification

Tax Deduction at Source remains one of the most time-consuming compliance areas for individuals and businesses. Many taxpayers feel the system has become overly complicated.

There are calls to reduce the number of TDS sections, merge low-impact provisions and limit rates to just two or three slabs. Removing the need for physical TDS certificates is another popular suggestion, as all details are already available online through Form 26AS and the Annual Information Statement (AIS).

Experts also suggest a TDS ledger system to prevent mismatches and unnecessary tax litigation.

Can Tax Policy Help Fight Air Pollution?

Air pollution continues to affect daily life in many Indian cities, posing serious health risks. Some taxpayers believe the tax system can play a role in encouraging cleaner choices.

There is a growing demand for special tax incentives for electric vehicle purchases, even under the new tax regime that offers fewer deductions. Given the public health impact of pollution, taxpayers argue this should be treated as an exception.

Companies are also being encouraged to channel a portion of their CSR spending into pollution control research and government-backed clean air initiatives, with such expenses allowed as tax deductions.

Budget 2026: Hope for Simpler and Fairer Taxation

As Budget day draws closer, taxpayers hope the government listens to these concerns and expectations. While many demands align with the government’s push for simplification, others reflect everyday challenges faced by citizens.