Union Finance Minister Nirmala Sitharaman will present the Union Budget for 2025-2026 on February 1.
Union Budget 2025-2026: Tax Relief Measures Under Consideration
The upcoming Union Budget 2025-2026, set to be presented by Finance Minister Nirmala Sitharaman on February 1, may introduce significant changes to the new tax regime, providing relief to taxpayers. According to a report by Business Standard, the government is considering making annual income up to ₹10 lakh tax-free and introducing a new 25% tax slab for income between ₹15 lakh and ₹20 lakh.
Currently, under the new tax regime, salaried individuals earning up to ₹7.75 lakh per year effectively have no tax liability due to the ₹75,000 standard deduction. Income above ₹15 lakh is taxed at the highest rate of 30%. The proposed changes could significantly ease the burden on middle- and upper-middle-income taxpayers.
A government source told Business Standard, “We are evaluating both options. If the budget permits, we may implement both measures—making income up to ₹10 lakh tax-free and introducing a 25% tax slab for income between ₹15 lakh and ₹20 lakh.” The source further stated that the government is prepared to absorb a revenue loss of ₹50,000 crore to ₹1 lakh crore as a result of these tax reforms.
Recommendations from Think Tanks
Ahead of the Budget, the Global Trade Research Initiative (GTRI) has proposed several tax reforms to address inflation and provide additional relief to taxpayers. Key recommendations include:
- Raising the income tax exemption threshold to ₹5.7 lakh, adjusted for inflation.
- Increasing fixed deductions, such as the savings interest deduction from ₹10,000 to ₹19,450 by 2025.
- Adjusting the ₹1.5 lakh deduction for insurance premiums and PF contributions to ₹2.6 lakh.
The GTRI also emphasized the importance of inflation-indexed tax slabs and exemptions to maintain the real value of tax benefits.
Market Expectations
Market analysts believe that, unlike last year, the Finance Minister is unlikely to announce surprises such as a hike in capital gains tax. Experts suggest that while the government may introduce tax measures to boost consumption amid slower economic growth, the Budget’s overall impact on growth revival and earnings is expected to be limited.
As taxpayers eagerly await the announcements, the proposed reforms could offer much-needed relief and support consumption while balancing the government’s fiscal priorities.
Apexadpros was unable to independently verify the report.
To Read More on Trending Topic and News Follow our Page- APEXADPROS
