Budget 2025: What to Expect from Budget?

As Finance Minister Nirmala Sitharaman gets ready to present the Budget 2025, experts from every sector are upbeat that major relief measures will be announced for the middle class. The new income tax regime that was introduced in 2020 has been subject to several amendments to make it more attractive to citizens. While the changes did bring about more adoption, according to experts, there is still scope to make it more attractive.

Key Changes to Expect

Several key changes are expected in the new income tax regime, including:

Increase in Basic Exemption Limit: The basic exemption limit may be increased from Rs 3,00,000 to Rs 3,50,000, providing relief to individuals by boosting disposable income.
NPS Boost: The government may extend the tax-exempt benefit to personal National Pension System (NPS) contributions, in addition to employer contributions.
Higher Rebate under Section 87A: The rebate under Section 87A may be extended to incomes up to Rs 8 lakh, giving taxpayers more room before higher tax rates apply.
New Tax Slab: A new tax slab may be introduced, levying 25% on incomes between Rs 15 lakh and Rs 18 lakh, while keeping the 30% rate for incomes above Rs 18 lakh.

The new tax regime income tax slabs are as follows:

Income Slab    Tax Rate

Up to Rs 3,00,000 - NIL
Rs 3,00,000 - Rs 7,00,000 - 5% 
Rs 7,00,000 - Rs 10,00,000 - 10% 
Rs 10,00,000 - Rs 12,00,000 - 15%
Rs 12,00,000 - Rs 15,00,000 - 20% 
Above Rs 15,00,000 - 30% 

A complete overhaul of the new income tax regime is expected in Budget 2025, which should ease the middle-class burden. The proposed increases in the basic exemption limit, NPS boost, and rebate under Section 87A would help ease taxpayers' burdens while boosting disposable incomes. As the Budget 2025 approaches, taxpayers can look forward to an even more attractive and simplified tax regime.

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