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Union Budget 2025 is around the corner, and salaried individuals have many expectations from FM Nirmala Sitharaman this year.
There is growing anticipation about potential income tax reforms, notably the introduction of inflation-adjusted basic exemption by tweaking the income tax slabs.
The ₹1.5 lakh deduction limit under Section 80C is expected to be revised to encourage investments in the Public Provident Fund (PPF) and other tax-saving instruments.
An increase in the standard deduction is also expected. Currently, salaried taxpayers can claim ₹75,000 under the new tax regime and ₹50,000 under the old regime.
Changes in income tax slabs and rate cuts are expected in the upcoming budget on February 1, 2025, including an increase in the 30% tax rate threshold.
Experts expect inflation-adjusted basic exemption slabs in Budget 2025, considering the rising cost of living and diminishing purchasing power.
Tax experts believe that providing inflation-adjusted tax relief to salaried employees will promote greater compliance and improve public perception of the tax regime.
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