 "Budget 2025: Sitharaman expected to tweak income tax structure, increase exemptions")
Union Finance Minister Nirmala Sitharaman is expected to tweak the income tax structure and increase exemptions for taxpayers in the Budget 2025.
Sitharaman will present her eighth budget on Saturday (February 1) at a time when middle class has been tax relief for months.
Amid such demands, CNBC TV18 reported that sources indicate that Sitharaman has considered measures to provide relief to the middle class.
Such relief could come in the form of adjustment to the income tax structure and increased tax exemptions for those earning up to Rs 15 lakh per year, according to sources.
While the specifics are not known at the moment, sources said that the tax structure and exemptions would be exempted such that people are encouraged to adopt the new income tax regime.
In the Budget 2020-21, Sitharaman introduced a new income tax regime that has lower tax rates but does away with tax exemptions. Mohammed S Chokhawala, a chartered accountant, noted in an article that the new income tax regime is more suitable for those with more personal commitments such as repayment of personal or vehicle loans and medical treatment of parents or dependents and have minimal tax deductions.
In the upcoming Budget 2025, Sitharaman may introduce reforms to make tax compliance more straightforward, reducing administrative burdens and enhancing efficiency in the tax system, according to CNBC TV-18.
Impact Shorts
More ShortsThe report further states that these expected moves come after many in the Union government advocated for putting more disposable income in the hands of people that would also drive consumption and reignite economic growth.
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