By Admin 
Old Tax Regime Removal Possibility: Less than two months are left for the presentation of the Union Budget 2026–27. Finance Minister Nirmala Sitharaman will present the third Union Budget of the third term of the Modi government. Like every year, this year too people have some tax related expectations from the budget.
One of the questions is, is the government now going to completely stop the old tax system? Ahead of the Union Budget 2026–27, speculations are rife that the government may consider removing the old tax system. Most of the taxpayers have already shifted to the new tax system.
Talking about the figures, about 9.19 crore people had filed their ITR in the financial year 2024–25. It is estimated that this number may increase to around 10 crores in the financial year 2025–26. 75 percent taxpayers have already adopted the new system.
In such a situation, it is expected that now this share will easily go above 80 percent. However, there is doubt regarding the old tax system whether the government will abolish it. According to a report published in Financial Express, experts believe that this possibility is less. There are many concrete reasons behind this…
1. The country’s savings structure is still dependent on the old system
Sandeep Bhalla, partner, Dhruva Advisors, told Financial Express that the old tax system has been a strong part of Indian household savings for a long time. Tax deductions like sections 80C, 80D and 24(b) attract people towards PPF, EPF, life insurance, pension plans and buying houses. He said that suddenly removing these incentives could weaken the Indian savings rate. Also, the retirement plans of lakhs of people may be in danger.
2. Cash flow is still based on cash related products
According to Sandeep Bhalla, a large part of India’s middle class has made their financial preparations keeping tax saving in mind. Many people have chosen schemes like long-term home loans, insurance policies and pension keeping the tax benefits in mind. These may get disrupted due to sudden changes. Besides, a feeling of dissatisfaction may also arise regarding this.
3. Dual framework helps the economy
He said that the dual framework works to protect against sudden behavioral shocks in the economy. Maintaining the old system along with the new system helps in building complete trust. He also said that business and financial institutions also believe in running things as before. Sudden removal of the old system may increase controversy.
4. Work is getting done easily
According to advocate Sharanya Tripathi, Jotwani Associates, the Income Tax Department is already handling returns under both the systems easily. By abolishing the old tax system, changes will have to be made in many sections. Due to which many types of problems can occur.
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