Budget 2025: Are these changes coming in Budget 2025 to promote the new tax system?

Budget 2025: India currently has two tax regimes for individual taxpayers. Those are old tax systems. New tax system. The new tax system is the default tax system. The old system allowed taxpayers to claim various exemptions and deductions. Many of these exemptions or deductions are banned in the new tax regime.

Description of the two tax systems

The Central Government has made filing income tax returns very easy. Therefore, many taxpayers are filing their returns (ITR) themselves. However, therefore sometimes, they face difficulty in choosing the most suitable tax regime for themselves. Taxpayers can change their tax policy every year. However, it is pertinent to note that a person earning income from a business or profession who has exercised the option to opt out of the new tax regime under section 115BAC can exercise the option to opt out of the said new tax regime only once. Can use.

The goal is to simplify

However, the new tax system has still not received widespread acceptance among taxpayers. The main reason for this is the restrictions imposed on claiming deductions and exemptions. Although the new tax system is much simpler but many people continue to follow the old tax system due to restrictions on claims.

change in tax slab

It seems that the central government may take some measures in the upcoming budget to encourage taxpayers to adopt the new tax system. It seems that 25% tax rate will be implemented for those with income between Rs 25 lakh to Rs 30 lakh and 30% tax will continue for those with income above Rs 30 lakh. This leads to a more gradual progression in tax rates for higher incomes. In this way the total tax (income tax) burden was reduced.

There are some exceptions to this also.

Standard discount: Rs. Standard deduction up to Rs 75,000. In the old tax system it was Rs. Only Rs 50,000. The limit of family pension has also been increased to Rs. It was increased to 25 thousand. In the old tax system it was Rs. Only Rs 15,000. Further, exemption under 80CCH(2) of the IT Act is available in respect of amounts paid or deposited into the Agniveer Corpus Fund. Shares contributed in NPS by the employer for the benefit of employees are also exempted under Section 80CCD(2).

Tax slab should be like this..

• Rupee. Up to Rs 5,00,000 – No tax.
• Rupee. 5,00,001 to Rs. 5% tax up to Rs 10,00,000
• Rupee. 10,00,001 to Rs. 10% tax up to Rs 15,00,000.
• Rupee. 15,00,001 to Rs. 15% tax up to Rs 20,00,000
• Rupee. 20,00,001 to Rs. 20% tax up to Rs 25,00,000
• Rupee. 25,00,001 to Rs. 25% tax up to Rs 30,00,000
• Rupee. 30% tax on income above Rs 30,00,000

These exceptions should also be given.

Experts suggest that the following exemptions should also be given to promote the new tax system. they are

• Under Section 80C, deductions should be allowed for social security payments like life insurance premium, National Savings Certificate, investment in Public Provident Fund. This increases investment in sovereign-backed instruments.
• Health insurance premium should be exempted under section 80D. Allowing this deduction under the new tax regime will remove health-related concerns among taxpayers.
• Under Section 80EEB, people can be encouraged to use EVs by giving interest subvention on loans up to Rs 1,50,000 taken for electric vehicles.