Budget 2025 and income tax: The country’s vast middle-class population is also calling for the inclusion of tax-saving provisions and deductions under the new income tax regime.
The Union Budget 2025 is just around the corner, and citizens have high expectations for income tax relief.
Though experts earlier told India today that significant tax relief measures are unlikely in the budget, taxpayers are still hoping for incremental changes to boost disposable income, given that the government is also looking to boost consumption.
Akhil Chandna, Partner at Grant Thornton Bharat, said, “new tax incentives for affordable housing could offer relief to first-time homebuyers and stimulate the real estate sector.”
The country’s vast middle class also calls for the new income tax regime to include tax-saving provisions and deductions.
The new income tax regime comes with lower tax slabs and a standard deduction of Rs 75,000, which is Rs 25,000 more than the old regime’s Rs 50,000.
However, the new regime still lacks the benefit of key deductions that make the old regime so popular amongst salaried taxpayers in the country, especially those with home loans.
The government can also consider rationalising capital gains taxation, which would boost investors and the broader economy. However, given that an announcement on this was made in the previous budget, this seems unlikely.
Pranav Haridasan, MD and CEO, Axis Securities, said, “Taxation expectations are centered around rationalising capital gains tax to simplify compliance and encourage broader market participation.”
While there has been some speculation about a cut in the Securities Transaction Tax (STT), Haridasan said this seems unlikely given the government’s focus on revenue.
“Instead, there could be targeted relief for individual taxpayers through higher deductions under section 80C and potential adjustments in the new tax regime to support consumption,” he added.
