Budget 2025 expectations of taxpayers: Experts have made a number of recommendations focusing on key changes in personal income tax, specific tax areas like EVs and crypto, housing benefits, savings incentives, and more.
As the date of Union Budget 2025 is approaching, discussions are increasing about the possible changes in the income tax policy for the common man. Experts have made several recommendations focusing on significant changes in personal income tax, specific tax areas like EVs and crypto, housing benefits, savings incentives and more. These proposed reforms are aimed at providing relief to taxpayers.
What are the expectations of taxpayers from Budget 2025
1) Change in income tax slab
The government should consider revising the tax slabs to provide relief to middle class taxpayers by potentially reducing personal income tax rates. Shefali Mundra, a tax expert at ClearTax, said, “While an increase to Rs 4 lakh is necessary, many taxpayers are expecting a limit of Rs 10 lakh. This could increase the overall disposable income and boost consumption.”
2) Home loan benefits in the new tax regime
Experts suggest that Finance Minister Nirmala Sitharaman should encourage home ownership by offering benefits under the new tax regime, even if they are lower than under the old tax system.
3) Incentives for homeowners
“Homebuyers can benefit from higher interest deduction limit on housing loans under Section 24(b). At least the deduction should be allowed on the entire interest paid for one house or the current limit of Rs 2 lakh should be increased to Rs 3 lakh,” said Dhruv Chopra, managing partner, Dewan PN Chopra & Co.
4) Higher NPS deduction
Abhishek Soni, CEO of Tax2Win, recommends increasing the additional NPS deduction limit from ₹50,000 to ₹1,00,000 and making withdrawals completely tax-free (EEE treatment).
5) HRA for Tier-2 cities
To ensure equal treatment for taxpayers living in high-cost urban centres, Soni has recommended extending the 50% HRA exemption to cities such as Hyderabad, Pune and Bengaluru.
6) Tax deduction under section 80D
Keeping in mind the rising health concerns, Shefali Mundra suggested that the tax deduction limit under Section 80D should be increased to Rs 50,000 for individuals and Rs 1,00,000 for senior citizens, from Rs 25,000 and Rs 50,000, respectively.
7) Defer TDS on PF interest
Abhishek Soni has recommended deferring tax deduction on interest above Rs 2.5 lakh till the time it is due to happen to improve the cash flow of taxpayers.
8) Capital gains tax
Niranjan Govindkar, tax expert at BDO India, feels that some changes need to be revisited from Budget 2024 with regard to tax on investment profits. He suggests taxing similar investments in the same way, like treating international and Indian stocks at par or taxing different types of gold investments consistently.
He also says that since taxes on stock profits have increased (from 15% to 20% for short term and from 10% to 12.5% for long term), the tax (STT) paid while buying and selling stocks should be abolished.
9) Higher basic exemption limit for senior citizens
Abhishek Soni has recommended providing more liberal exemption limits to senior citizens to ease their financial pressures.
10) Revising Section 80C limit
This has remained unchanged since 2014, it is important and much needed to encourage and promote investments in financial instruments like tax saving FDs, PPF, etc.
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