Budget 2025-26: EY Chief Policy Advisor DK Srivastava says that the upcoming budget needs to focus on domestic factors like reducing personal income tax and allocating more capital expenditure to boost growth amid global economic uncertainties.
Union Budget 2025: Everyone is expecting relief in income tax in Budget 2025. What is the decision of the government in this direction, it will be revealed only when the budget is presented on January 1. However, the round of speculations continues, under which there is also an estimate that the government can announce a framework to gradually abolish the old income tax system in the next few years while making the new tax system attractive.
A report by CNBC-TV18 said that the government is considering a plan to give tax relief to taxpayers, which will boost consumption and economic activity. Also, consideration is being given to making the new income tax system more beneficial or attractive.
Two options are being considered
The report quoted sources as saying that the government is considering two options to provide tax relief under the new tax system. The first option is to further increase the limit of standard deduction under the new tax system for salaried taxpayers. Currently, the limit of standard deduction under the new tax system is Rs 75,000.
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The second option is to adjust the tax slabs in the new tax system. The government can expand the 20% tax slab under the new system and cover income of ₹ 12-18 lakh or up to ₹ 20 lakh annually. Apart from this, a tax bracket of 30% can be imposed on income above ₹ 18 lakh or ₹ 20 lakh. The current tax slabs under the new income tax regime are as follows…
₹0 to ₹3,00,000: 0%
₹3,00,001 to ₹7,00,000: 5%
₹7,00,001 to ₹10,00,000: 10%
₹10,00,001 to ₹12,00,000: 15%
₹12,00,001 to ₹15,00,000: 20%
More than ₹15,00,001: 30%
Ahead of the budget, many tax experts and industry bodies are expecting that the government will revise the tax slabs and rates under the new system to put more money in the hands of taxpayers. Recently, EY India said that it expects the government to increase the basic exemption limit from ₹ 3 lakh to ₹ 5 lakh and also reduce tax rates in the new income tax system. EY Chief Policy Advisor DK Srivastava says that the upcoming budget needs to focus on domestic factors like reducing personal income tax and allocating more capital expenditure to boost growth amid global economic uncertainties.
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