Tax, NPS, labour codes: How 2025's changes will affect your wallet in 2026

The year 2025 emerged as a pivotal year for household finances—marked by significant changes like a reduction in mandatory annuitization in the National Pension System (NPS), lower income tax rates, GST slab rationalization, and the introduction of new labour codes—laying the groundwork for how Indians will plan, save, and invest in 2026.For instance, the new tax regime has emerged as the obvious choice for most taxpayers following the increase in the rebate limit to ₹12 lakh. To make the old regime work, taxpayers would now need to claim deductions of over ₹8 lakh a year—a tough target given the ₹1.5 lakh cap under Section 80C and no change in the ₹50,000 standard deduction for years.

This effectively ends the year-end tax-saving rush and allows investors to choose products based on financial goals rather than tax optimization.Similarly, market trends and currency movement will also influence financial choices. After a five-year bull run, 2025 saw muted equity returns.

This, alongside a rally in gold and stronger global markets, forced investors who have entered the markets post-2020 to confront the importance of asset allocation rather than relying solely on equities for returns.This story looks at the key personal finance events of 2025 that will have a major impact on your money decisions in 2026.The events of 2025 delivered a clear lesson on the risks of keeping money anchored to a single market and a single currency. The rupee’s sharp depreciation—nearly 5% against the US dollar and about 12% versus the euro—quietly but materially altered financial planning for households with overseas goals.“When the rupee falls 5-12% in a single year, overseas goals like children’s education, foreign travel or planned remittances