The next Union Budget for 2025-2026 is likely to offer big benefits to individual taxpayers in India. Reports say there could be important changes to the income tax system. Reliable sources claim the government is planning to make income up to Rs 10 lakh free from tax. They are also thinking of adding a new 25% tax rate for people earning between Rs 15 lakh and Rs 20 lakh per year. This move could help reduce the tax pressure on middle-class earners and boost spending.
Key Highlights:
- Income up to Rs 10 Lakh Tax-Free: According to reports, the government is planning to make income up to Rs 10 lakh per year tax-free under the new tax system. This change is likely to help many taxpayers, especially those with middle-level incomes. Right now, people earning between Rs 5 lakh and Rs 10 lakh pay 20% in taxes. This tax may be removed to increase their take-home income and encourage more spending.
- Introduction of a New 25% Tax Slab: The government might add a new 25% tax rate for people earning between Rs 15 lakh and Rs 20 lakh per year. Right now, the highest tax rate is 30%, which applies to incomes over Rs 10 lakh. This new tax rate could help people in the middle-to-high income group pay less tax, making it easier for them to support the economy while keeping the tax system fair.
- Expected Tax Relief Measures: Experts think the 2025 Budget will aim to help people by reducing taxes to boost spending. Taxpayers might also get a higher tax refund under section 87A, which could raise the income limit for a full tax refund. This is likely to help those with lower incomes and promote saving and investing.
- Tax Deduction on Home Loans: Reports also say the government might reduce taxes on home loan interest to help the housing sector. This could be a key move to increase demand for real estate, which is very important for the economy’s growth.
- Push for Higher Consumption: The Finance Ministry is planning to take steps to boost spending during these tough economic times. They aim to help taxpayers directly, which should help the economy recover steadily.
Government’s Vision:
The decision to not tax income up to Rs 10 lakh and introduce a 25% tax rate is part of the government’s plan to create a fairer tax system. By reducing taxes for people earning between Rs 5 lakh and Rs 10 lakh and offering a good tax rate for those earning more, the government wants to increase people’s take-home income, encourage saving, and boost spending in the economy.
What This Means for Taxpayers:
If these plans are put into action, a large number of Indian workers will get relief on their income taxes, which could mean they have more money to spend. This change might help boost spending in areas like shops, housing, and cars. People earning between Rs 15 lakh and Rs 20 lakh might also pay less tax under the new rules.
But these ideas are still being discussed, and people will have to wait for the official details in the Union Budget for 2025-2026. Finance Minister Nirmala Sitharaman will present the budget on February 1, 2025, and it will likely shape India’s economic plans for the next year.
Stay tuned to Swadesi.com for more updates on the Budget 2025 and its impact on taxpayers across India.
BY – NIKITA
