Budget 2025 might just have some good news for you. The government may bring up some significant changes to the new tax regime, and it could mean more money in your pocket. Annual income up to ₹10 lakh may be completely tax-free. There's also talk of introducing a new 25% tax slab for those earning between ₹15 lakh and ₹20 lakh. If these changes see the light of day, it would be a major win for salaried taxpayers who have been feeling the pinch of inflation.
Under the new tax regime, you effectively pay no tax on income up to ₹7.75 lakh, thanks to the standard deduction. But anything above ₹15 lakh puts you in the highest tax bracket of 30%. Ouch!
Now, the government seems to be acknowledging the need for some relief. Sources suggest they're seriously considering these changes and are even prepared to take a potential revenue hit of ₹50,000 crore to ₹1 lakh crore to make it happen. It shows that the government might be prioritizing putting more money back into the hands of taxpayers.
Till it is announced we'll have to wait for the official announcement on February 1st to know for sure. But this news has already sparked a lot of excitement among taxpayers and market watchers. Interestingly, this isn't the only voice calling for tax reforms. The Global Trade Research Initiative (GTRI) has also been, recommending an even higher tax exemption threshold of ₹5.7 lakh, adjusted for inflation. They've have suggested boosting deductions and exemptions for things like savings interest and insurance premiums. Clearly, there's a growing consensus that the tax system needs a refresh.
While the possibility of tax cuts is definitely exciting, it's important to remember that the budget has a lot more ground to cover. Experts believe that this year's focus will be on boosting consumption and reviving growth, which has taken a bit of a hit recently. While tax relief might be on the cards, it's likely to be part of a broader strategy to get the economy back on track.
If the government delivers on these proposed tax changes, it could provide a much-needed boost to disposable income, stimulate spending, and contribute to overall economic recovery. It's a move that could put smiles on the faces of taxpayers and set a positive tone for the year ahead.
