The current year\u2019s budget announcement, due on February 1, 2023, has a lot of positive changes expected in the capital gains rate of the current tax system, especially from the taxpayers. Particular focus is paid to encouraging long-term equity investing with specific tax provisions. The Union budget announcement comes with high prior expectations relating to tax deductions, inflation management, higher investment income, social welfare and infrastructure improvement, etc. In a nutshell, people wish for a better tomorrow. Similarly, the current year\u2019s budget announcement, due on February 1, 2023, has a lot of positive changes expected in the current tax system, especially from the taxpayers. According to the income tax department reports, around 50% of the ITRs filed in 2022 were done by salaried individuals (ITR-1), who account for a larger group of taxpayers. The current budget announcement should focus on widening the tax base to provide relief to the taxpayers and grow the government\u2019s tax revenues. Below are some significant changes expected from the income tax news of the current year\u2019s Union budget. Capital gains tax rate \u2013 Capital assets have different holding periods and tax rates. For example, gold and debt fund units must be held for at least three years to be classified as long-term capital assets, equity fund units for one year, etc. Investors consider encouraging long-term investing with proper tax provisions. They suggest that there shouldn\u2019t be any long term capital gains tax if investments in listed or unlisted stocks or equity mutual funds are held for a minimum of ten years. Simplified tax structure \u2013 As per the previous budget, the income tax system did not meet the taxpayer\u2019s expectations. Therefore, the new budget is expected to have a simplified tax structure with more exemptions and deductions for taxpayers. Rate revisions in long-term and short-term capital gains \u2013 There is a need to encourage long-term and short-term investing with suitable tax soaps. Having short-term equity capital gains at 15% tax with an income tax rate of 5% is punitive for investors. Similarly, the long term capital gain tax rate on debt funds should also be reduced from 20% when inflation has surged and tax rates have declined due to the pandemic. Children\u2019s education and hostel allowances \u2013 The education and hostel allowances for children of government employees have not been revised for more than four years. Their current monthly exemptions are Rs 2,250 and Rs 6,750 per child for education and hostel costs, respectively. It is expected to rise to Rs 3,000 and Rs 7,500 per child, respectively. Interest on a housing loan \u2013 Interest taken on a home loan during the construction period is allowed for deduction in five equal installments from the year of completion of construction. However, irrespective of the construction status, the buyer is paying the EMI, so the interest deduction should start from the year of payment itself. Capital gains tax on stocks \u2013 Current year\u2019s Union Budget capital gains tax on long-term equity funds, units of listed and unlisted equity should be waived off for holding beyond seven years. Such rebates on taxes on stocks and other additional rebates are likely to enhance the trading volumes in Indian markets, which can also drive economies. As per the current budget expectations, there is an urgent need to rephrase the entire system of capital gains tax. India is in high hopes of driving the economy by eroding the impact of current laws of taxes on stock gains, particularly long term capital gains, and not mingling with things that are already functioning correctly.