Budget 2025: These changes in income tax are likely to happen in the upcoming Union Budget 2025

Expectations from Budget 2025: Union Finance Minister Nirmala Sitharaman is preparing to present the Union Budget 2025 in the Parliament. Salaried people have a lot of expectations from the upcoming budget. There are many news coming regarding what tax reforms Nirmala Sitharaman will bring in the budget. Taxpayers are demanding some relaxations, especially in view of rising inflation. Mumbai-based tax and investment expert Balwant Jain has outlined five key tax changes that salaried people are expecting from the second budget of the Modi 3.0 government. they are

1) Income tax slab rate

To attract taxpayers from the old tax system to the new tax system. There is discussion that the government may change the income tax slab in the new tax system. Keeping inflation in mind, a tax rate of 30 per cent is likely to be applicable at income levels above Rs 20 lakh.

Current tax slab under the new income tax system

Rs 0 – Rs 3 lakh – No: If your annual income is between Rs 0 to Rs 300,000, you will not have to pay any income tax.
Rupee. 3- Rs. 7 lakh – 5%: Your income is Rs. 300,001 and Rs. You will have to pay 5% tax on amounts above Rs 700,000 and Rs 300,000.
Rs 7-10 lakh – 10%: Your income is Rs. 700,001 and Rs. You will have to pay 10% tax on amounts above Rs 1,000,000.
Rs 10-12 lakh – 15%: Your income is Rs. 1,000,001 and Rs. You will have to pay 15% tax on amounts above Rs 1,200,000.
Rs 12-15 lakh – 20%: If your income is between Rs 1,200,001 to Rs 1,500,000, you will have to pay 20% tax on the amount above Rs 1,200,000.
Above Rs 15 lakh – 30%: Your income is Rs. You will have to pay 30% tax on amounts above Rs 1,500,000.

2) Special tax slab for senior citizens under the new system

In the new tax regime the tax slabs are the same for all taxpayers regardless of age. However, the government is likely to introduce a different tax regime in the new system, especially for senior citizens. For example, senior citizens (60 years of age and older) may be given higher exemption limits or lower tax rates. This makes the tax system more favorable for them. Under the old tax system, the basic exemption limit was Rs 3 lakh for senior citizens and Rs 5 lakh for extremely senior citizens.

3) Standard Deduction

The issue of increasing the standard deduction for salaried employees is also being discussed. The standard deduction for salaried employees and pensioners is a flat deduction of Rs 50,000 under the old tax system and Rs 75,000 under the new tax system, irrespective of their income. The standard deduction is being sought to be linked to a certain proportion of an individual’s income, with a maximum limit of Rs 1 lakh, irrespective of the tax regime chosen. It allows salary-based adjustments to the standard deduction. More support for higher earners.

4) Import duty on gold

To address concerns over trade deficit, the government may increase import duty on gold to reduce excess imports. There are concerns domestically that the Indian government may increase the import duty on gold in the upcoming Union Budget to curb gold imports and resolve the trade deficit. “Such a move leads to price adjustments and possible divergence from international markets,” said Sugandha Sachdeva, founder of SS Wealth Street.

5) Section 80C Deduction

The Section 80C deduction limit, which has increased slightly over the years, has become a topic of discussion among tax experts. In 2003, the maximum deduction under section 80C was Rs. Discount of. In 2014, this limit was increased to Rs 1.5 lakh and there was some relief, but this increase was not enough to keep pace with inflation. With rising cost of living and increasing financial burden on taxpayers, there is a demand to increase the Section 80C limit to Rs 3.5 lakh in line with the current economic conditions.

IT Benefits for Home Loan EMI

Many are demanding that interest exemption on home loans should not be clubbed under Section 80C and a separate, higher exemption limit should be given. These include the limit of Rs 1.5 lakh under Section 80C along with other exemptions on investments like PPF, ELSS, life insurance premium.

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