Union Budget 2025: Finance Minister Nirmala Sitharaman will present the country’s budget on 1 February. Everyone has high expectations from this budget. DK Srivastava, chief policy advisor at Ernst & Young (EY), says the Budget needs to focus on domestic factors like reducing personal income tax and allocating more capital expenditure to boost growth amid global economic uncertainty.
this announcement
It is believed that a lot of relief regarding income tax can be announced in the budget. Apart from this, some announcements related to reform in the tax system are also possible. Experts believe that the government is considering a plan to provide tax relief to taxpayers, which will boost consumption and economic activities. Besides, emphasis will also be laid on making the new tax system more beneficial or attractive.
Two options are being considered
In a CNBC report, quoting sources, it has been said that the government is considering two options to provide tax relief under the new tax system. The first option is to further increase the standard deduction limit under the new tax system for salaried taxpayers. However, the standard deduction limit under the new tax system is Rs 75,000.
area to be covered
The second option is to adjust the tax slabs in the new tax system. Under the new system, the government can increase the tax slab by 20 percent and bring interest income of Rs 12-18 lakh or Rs 20 lakh per day under its ambit. Apart from this, a tax bracket of 30 percent can be imposed on income above Rs 18 or 20 lakh. The existing tax slabs under the new income tax system are as follows.
- ₹0 to ₹3,00,000: 0%
- ₹3,00,001 to ₹7,00,000: 5%
- ₹7,00,001 to ₹10,00,000: 10%
- ₹10,00,001 to ₹12,00,000: 15%
- ₹12,00,001 to ₹15,00,000: 20%
- 30% above ₹15,00,001
Tax experts and industry body hope
That the government will amend the tax slabs and rates under the new tax regime to put more money in the hands of taxpayers. At present, EY India said that they hope that the government can increase the basic exemption limit from Rs 3 lakh to Rs 5 lakh. Apart from this, tax rates can also be revised under the new tax system. DK Srivastava, chief policy advisor at EY, says the Budget needs to focus on domestic factors such as allocating more capital expenditure to make up for lower personal incomes and boosting growth amid the global economic slowdown.
