There is a strong industry expectation that the exemption limit for Long-Term Capital Gains (LTCG) on equities, currently set at ₹1.25 lakh, may be increased to ₹2 lakh or higher, which would allow investors to retain a greater portion of their returns, says Aakash Uppal, Partner at BDO India.

Tax experts say Budget 2025 should allow the inclusion of the following popular deductions under the New Tax Regime:

• Section 80C: Deductions up to ₹2 lakh for life insurance premiums, employees’ Provident Fund contributions, etc.

• Section 80D: Deduction up to ₹1 lakh for health insurance premiums for self and family, addressing the growing burden of medical expenses.

• Section 80TTB: Deduction of up to ₹50,000 for senior citizens earning interest from deposits with banks, post offices, etc.

• 10(13A): Salaried taxpayers should be allowed to claim HRA deductions for rental expenditure under the new regime.

• Increase the basic exemption limit of income from ₹3 lakh to ₹5 lakh

• The differences between tax slabs are currently inconsistent at ₹2 lakh or ₹3 lakh. "A more uniform approach is needed with consistent income gaps."

• Introducing a new 25% tax rate slab will provide further tax relief for middle-income earners. The tax rates currently stand at 5%, 10%, 15%, 20% and 30%.

• The income limit for the 30% should be enhanced from ₹15 lakhs to ₹20 lakhs.

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"An important aspect of PMAY is interest subsidy on home loans, and direct subsidy for individual house construction or enhancement. However, to qualify for these subsidies, properties need title documents - a big hurdle, since India's land records system is far from sophisticated enough right now to address the task holistically and at scale," he adds.

"These measures would make the new tax regime more taxpayer-friendly, encourage savings and investments, and support economic growth," says Uppal.

"As India advances toward financial inclusivity and universal healthcare, Budget 2025 offers a pivotal opportunity to further strengthen the health insurance sector. Anticipated policy measures include enhancing accessibility, simplifying tax benefits, and encouraging innovation in insurance products," says Naveen Chandra Jha, MD & CEO, SBI General Insurance.

Ahead of the Budget, a majority of the members surveyed by FICCI favoured review of the direct tax structure with a view to spur demand and boost growth. A re-look at the slabs and the tax rates is warranted as this could leave more money in the hands of people and spur consumption demand in the economy, FICCI said. On the taxation front, providing tax certainty, addressing custom duty inversion, and rationalisation of TDS provisions were highlighted as important themes by the participants. (Source: PTI)

In Budget 2024, the government shortened the number of tax slabs in the new tax regime. Now, there are five tax slabs taxed at 5% to 30%. The following table shows current tax rates and slabs:

"Under the earlier provision of Section 80EEB of the Income-tax Act,1961, tax concession of upto ₹1.5 lakh on interest on loan was available to individuals buying EVs for loan on such EVs availed between 01 April 2019 to 31 March 2023. While the government had not extended this tax concession for loan sanctions post 31 March 2023 in the Budget 2024, considering the need of an hour for encouraging EV sales at much higher scale, it is imperative for extending such tax concession at least till 2030," the expert says.