Union Budget 2025 Wishlist: Taxpayers Seek Relief, Deductions, and Slab Relaxation
As we approach the upcoming Union Budget 2025 announcement on February 1,
With the Union Budget 2025 less than a month away, individual taxpayers from middle-class families to young professionals and senior citizens all have their own Budget wishlist.
SR Patnaik, Partner (Head – Taxation) at Cyril Amarchand Mangaldas, suggests that the government should provide benefits to the middle class by capping the maximum tax rate at 30 percent under the new tax regime. He also recommends including specific benefits like higher deductions for housing loans.
Moneycontrol interviewed four taxpayers to discover what they hope to see in Budget 2025, set to be presented on February 1.
Parijat Garg, a 45-year-old digital lending consultant from Pune, hopes for tax relaxation under the new tax regime. He suggests that the highest 30 percent tax rate should only apply to those earning over Rs 20 lakh.
Khyati Amlani, a 40-year-old corporate legal counsel from Mumbai, believes that the current Rs 1.5 lakh deduction limit under section 80C is insufficient for taxpayers’ financial needs. She hopes that Finance Minister Nirmala Sitharaman will introduce additional benefits under the new tax regime.
Overall, taxpayers are looking for further relaxation in income tax slabs, higher deductions under section 80C, and a more appealing tax regime in Budget 2025.
This section discusses various investment options, such as the Public Provident Fund (PPF), National Savings Certificate (NSC), Equity Linked Savings Scheme (ELSS), and tuition fees.
Amlani believes that the Union Budget 2025 should include section 80C deductions in the new regime and double the limit to Rs 3 lakh to promote disciplined savings.
If these deductions cannot be included in the new regime, tax experts suggest increasing the limits in the old regime. Sameena Jahangir, Partner at Kochhar & Co, suggests raising the 80C limit to Rs 2 lakh to better reflect current expenses in education, housing, and savings. Alternatively, she proposes introducing separate sub-limits for specific expenses, such as Rs 50,000 for tuition fees and Rs 50,000 for housing loan principal repayments.
Ankit Namdeo, Managing Partner at ANK Legal, recommends increasing the basic exemption limit under the old regime to Rs 3.5 lakh.
To reduce the tax burden on interest income from fixed deposits (FDs), Garg suggests aligning the taxation with the long-term capital gains (LTCG) tax rate of 12.5 percent for other asset classes. He proposes taxing interest income from FDs with a tenure of over 36 months at 12.5 percent, while shorter-term FDs are taxed according to income tax slab rates. This approach aims to encourage more people to invest in FDs for portfolio diversification.
Tejash Gandhi, a 45-year-old manager in Mumbai, calls for an increase in the basic exemption limit under the old tax regime, which has remained at Rs 2.5 lakh since the financial year 2014-15 despite inflationary pressures.
For more market insights, follow our blog.
Stay tuned for more updates and insights on the stock market! For more insights on investing in the Indian stock market, check out resource like ET, NSE India.
Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.