As the government prepares for Budget 2025, several income tax changes are anticipated, potentially benefiting salaried individuals amid rising inflation. Here are five key expected reforms:
- Income Tax Slab Rates
The government may revise the new tax regime by increasing the 30% tax rate threshold to ₹20 lakh, aligning it with current economic conditions.
- Special Slabs for Senior Citizens
Differentiated tax slabs for senior citizens may be introduced, providing higher exemption limits or lower tax rates, similar to the old regime where seniors had higher basic exemptions.
- Standard Deduction Increase
The standard deduction for salaried individuals could rise, potentially up to ₹1 lakh, offering additional tax relief irrespective of income levels.
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- Import Duty on Gold
To curb gold imports and manage the trade deficit, the import duty on gold may be raised, following its reduction in 2024.
- Section 80C Limit Expansion
The Section 80C deduction limit may increase from ₹1.5 lakh to ₹3.5 lakh, addressing inflation and rising costs. A separate, higher limit for housing loan interest deductions may also be introduced, instead of including them under the Section 80C cap.