Budget 2026: Experts Demand Home Loan, Health Cover in New Tax Regime

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AuthorKavya Nair|Published at:
Budget 2026: Experts Demand Home Loan, Health Cover in New Tax Regime
Overview

As India's Union Budget 2026 approaches, tax experts are advocating for significant enhancements to the new tax regime. Key demands include integrating deductions for home loan interest and medical insurance, alongside increased benefits for preventive healthcare. These proposals aim to address rising medical inflation and simplify tax compliance, potentially stimulating household consumption and savings by offering more equitable relief amid escalating living costs.

Medical inflation in India, projected at 11.5%-14% annually, is placing significant pressure on household finances. This escalating cost fuels a strong demand for tax relief measures in the upcoming Union Budget 2026. Experts argue that the current new tax regime, while simplified, lacks crucial deductions that offer tangible financial support to citizens amidst rising living expenses.

Combating Medical Inflation

Public health expenditure in India remains below global benchmarks and national policy targets. Srikanth Kandikonda, Chief Financial Officer at ManipalCigna Health Insurance, suggests increasing the budgetary outlay for public health to bolster primary care networks and alleviate financial stress on citizens. He emphasized, "Introducing separate and enhanced tax benefits for OPD services and preventive health screenings, beyond the current limits under Section 80D, would encourage wider adoption of preventive care." These additions could significantly aid senior citizens.

Expanding Tax Benefits

Prashant Mishra, founder and CEO of Agnam Advisors, proposes simplifying the new tax regime by integrating essential deductions. His recommendations include allowing deductions for housing loan interest and raising the limits for medical insurance under Section 80D. He suggests limits of ₹50,000 for self/family and ₹1 lakh for senior citizens. Mishra contends these changes would ease compliance burdens and offer equitable relief, enabling families to allocate more towards productive investments.

Future-Oriented Incentives

Experts also highlight the need for long-term strategies, such as enhancing retirement savings deductions and incentivizing green projects, particularly within GIFT City. These measures align with sustainable growth objectives. Streamlining family office operations, clarifying TDS on partner remuneration, and offering family-centric boosts like higher allowances for elderly and child care are also considered vital. These adjustments would address demographic shifts and unlock professional productivity, aiming for a fairer and more predictable tax framework.

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