With Union Finance Minister Nirmala Sitharaman set to present Budget 2025, taxpayers are eagerly anticipating reforms, particularly in the personal taxation sector. With no significant tax reforms seen in the past 10 years, the Modi government may deliver this time what has been on the minds of crores of taxpayers.
Also ReadIncome Tax Slab Rates for FY 2025-26 Live Updates: Union Budget 2025 – Big tax changes ahead – Standard Deduction hike, new tax slab, and more!
Taxpayers’ wishlist
1. Increase in Basic Tax Exemption Limit
Taxpayers are expecting an increase in the basic exemption limit from Rs 3 lakh to Rs 5 lakh under the New Tax Regime (NTR). This would ensure that individuals earning up to Rs 10 lakh benefit from lower tax rates and rebates, boosting disposable income.
2. Home Loan Benefits Under New Tax Regime
Currently, home loan deductions under Section 24B are only available under the Old Tax Regime. Taxpayers want these benefits to be extended to the New Tax Regime, allowing deductions on home loan interest payments and promoting homeownership.
3. Higher Standard Deduction for Salaried Individuals
The Standard Deduction was last raised to Rs 75,000 in Budget 2024. Taxpayers now seek an increase to Rs 1 lakh, which would help salaried individuals save more on taxable income.
4. More Tax Relief for Middle-Income Earners
With the 30% tax rate currently applicable for incomes above Rs 15 lakh, there is a growing demand for a new 25% tax slab for incomes between Rs 15 lakh and Rs 20 lakh. This would reduce the tax burden on middle-class earners.
5. Tax-Free Income Up to Rs 10 Lakh
If the basic exemption limit is raised to Rs 5 lakh, taxpayers want a 5% tax rate for incomes between Rs 5 lakh and Rs 10 lakh, effectively making income up to Rs 10 lakh tax-free after rebates.
6. National Pension System (NPS) Tax Benefits
Employees under the New Tax Regime are seeking deduction benefits on NPS contributions, similar to the Rs 2 lakh deduction under the Old Tax Regime. This would encourage more individuals to invest in retirement savings.
7. EPF Tax Benefits in NTR
With the upcoming EPFO 3.0 reforms,
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