NewsBytes
    Hindi Tamil Telugu
    More
    In the news
    Narendra Modi
    Amit Shah
    Box Office Collection
    Bharatiya Janata Party (BJP)
    OTT releases
    Hindi Tamil Telugu
    NewsBytes
    User Placeholder

    Hi,

    Logout

    India
    Business
    World
    Politics
    Sports
    Technology
    Entertainment
    Auto
    Lifestyle
    Inspirational
    Career
    Bengaluru
    Delhi
    Mumbai

    Download Android App

    Follow us on
    • Facebook
    • Twitter
    • Linkedin
    Home / News / Business News / Budget 2025 might bring relief for taxpayers: Check expected reforms 
    Summarize
    Next Article
    Budget 2025 might bring relief for taxpayers: Check expected reforms 
    Union Budget 2025 will be presented on February 1

    Budget 2025 might bring relief for taxpayers: Check expected reforms 

    By Mudit Dube
    Jan 29, 2025
    12:38 pm

    What's the story

    As India approaches the Union Budget 2025, expectations are high for significant changes in tax rates and exemptions that could ease the financial burden on individuals, particularly middle-class taxpayers.

    Finance Minister Nirmala Sitharaman is set to present the budget on February 1, and discussions surrounding potential reforms have intensified in recent days.

    Analysts and experts are advocating for adjustments to income tax slabs and an increase in the basic exemption limit to enhance disposable income for taxpayers.

    Understanding basic

    First, let's understand India's new and old income tax regimes

    India currently followst two tax regimes: Old Tax Regime (OTR) and New Tax Regime (NTR).

    The OTR provides deductions and exemptions on investments in insurance, PFs, and housing loans. Under this regime, income above ₹10 lakh is taxed at 30%.

    NTR, launched in 2020, offers lower tax rates but doesn't provide major exemptions or deductions. In this regime, income between ₹10-12 lakh is taxed at 15%, income between ₹12-15 lakh at 20%, and income above ₹15 lakh at 30%.

    Big change

    Annual income up to ₹10L may become tax-free

    Indian government earns most of its income tax from those earning ₹10 lakh or more, taxed at 30% under OTR.

    The reforms in Budget 2025 could make an annual income of up to ₹10 lakh tax-free, up from ₹7.75 lakh in NTR.

    This could be done by extending the benefit of exemption of interest (up to ₹2 lakh) on housing loans to the new regime.

    The move will bring much-needed relief to homebuyers, making property ownership more affordable and accessible.

    Tax modifications

    Anticipated modifications to capital gains tax

    As interest in stock market and mutual funds increases, many investors are moving away from traditional bank deposits.

    This has made it difficult for the banking sector to raise low-cost CASA deposits. To counter this, the government is likely to reclassify bank deposits as capital assets.

    The redemption amount paid on maturity would be treated as sale consideration and any excess amount taxed as capital gains.

    This would encourage more people toward fixed deposits while providing a favorable tax environment.

    Tax simplification

    Simplification of residential status determination

    The government is also looking to simplify the determination of an individual's residential status for income tax purposes.

    Currently, India's income tax system classifies individuals into three categories: Resident, Resident but Not Ordinarily Resident (RNOR), and Non-Resident.

    The proposed change would introduce a two-tier system: Resident and Non-Resident, based primarily on the number of days spent in India during a financial year.

    This would eliminate ambiguity in residency determination and align with global standards.

    Joint taxation

    Joint taxation for married couples could be introduced

    The Union Budget 2025 could also introduce joint taxation for married couples.

    The proposal has been suggested by the Institute of Chartered Accountants of India (ICAI).

    Under the new system, couples would be able to file their income tax returns (ITRs) jointly under the New Tax Regime.

    The move would provide relief to families with a single source of income and promote better tax compliance.

    Facebook
    Whatsapp
    Twitter
    Linkedin
    Related News
    Latest
    Nirmala Sitharaman
    Union Budget

    Latest

    Amazon's drones will now deliver your iPhone in an hour Amazon
    Apple AirPlay bug makes iPhones hackable—Here's how to protect yours Apple
    India likely to announce Test captain on May 24: Report Rohit Sharma
    'Wouldn't want that guy to babysit my kid'—Musk on Gates Bill Gates

    Nirmala Sitharaman

    PM Internship Scheme: 193 companies offer over 90,800 opportunities Ministry of Corporate Affairs
    Hindustan Aeronautics Limited becomes 14th Maharatna company: Know its significance Government of India
    Multi-bagger HAL surges 2% on getting 'Maharatna' status Hindustan Aeronautics Limited
    Government announces 3% DA hike for 1 crore employees, pensioners Inflation

    Union Budget

    Budget 2024: MK Stalin lists out Tamil Nadu's wish list  Chennai
    Budget 2024: Auto industry eyeing higher scrappage incentives, FAME 3 Indian Government
    Centre will offer you ₹15,000 if you are a fresher Nirmala Sitharaman
    Budget 2024: Long-term capital gains tax hiked, exemption limit raised Nirmala Sitharaman
    Indian Premier League (IPL) Celebrity Hollywood Bollywood UEFA Champions League Tennis Football Smartphones Cryptocurrency Upcoming Movies Premier League Cricket News Latest automobiles Latest Cars Upcoming Cars Latest Bikes Upcoming Tablets
    About Us Privacy Policy Terms & Conditions Contact Us Ethical Conduct Grievance Redressal News News Archive Topics Archive Download DevBytes Find Cricket Statistics
    Follow us on
    Facebook Twitter Linkedin
    All rights reserved © NewsBytes 2025