Income Tax Budget 2025 Expectations: As the Union Budget 2025, scheduled for February 1, approaches, expectations among salaried individuals for potential income tax relief are mounting. In Budget 2020, Finance Minister Nirmala Sitharaman unveiled the New Tax Regime, which aimed to streamline the taxing process by lowering tax rates and eliminating most exemptions and deductions.
1) Raise tax slabs
An industry expert, urges the Budget to prioritise inflation and increase income tax slabs to provide relief to salaried individuals, boosting disposable income and consumer spending.
“Budget 2025 should prioritise inflation as a critical factor, and the Finance Ministry must consider increasing tax slabs. This will provide significant relief to salaried individuals, leaving them with increased disposable income and boosting consumer spending,” he said.
2) NPS
Simplifying or removing taxes on annuity and pension products, including those under the National Pension System (NPS), will encourage greater participation in retirement planning. “Extending the ₹50,000 tax exemption for NPS contributions to annuities and pensions will help millions secure post-retirement income,” another industry expert said.
3) New tax regime
“Every year, taxpayers are made to follow new rules set in the budget. This can sometimes upset the long-term planning that individuals might have done for their investments and financial goals. The New Tax Regime has already been made attractive for non-savers to boost consumption. Let the tax-savers also live their plans and not get into the trap of lower tax rates because future financial responsibilities aren’t getting shifted with simplified tax regimes. Let the taxpayers and their advisors choose the regime that suits them best. This will truly be a more democratic approach instead of forcing the new tax regime on taxpayers,” another industry expert said.
4) Real estate sector
The 2025 Union Budget presents a critical opportunity to address key challenges in the real estate sector, especially as rising home prices and borrowing costs have begun to affect buyer sentiment. “A reduction in tax rates and direct tax slab revisions can directly enhance purchasing power, encouraging homeownership and boosting sales.” another industry expert.
5) ESOPs
Another industry expert suggests that shifting the taxation of ESOPs from perquisite to capital gains would reduce employees’ tax burden, making ESOPs more attractive for talent retention and supporting sustainable startup growth.
6) Enhanced Tax Benefits for Life and Health Insurance
“Offering a separate limit for deductions under Section 80C for insurance premiums will make insurance more accessible and attractive, helping bridge the coverage gap,” another industry expert said.
Union Budget 2025: Date and time
Finance Minister Nirmala Sitharaman will likely present the Union Budget 2025 on 1st February 2025. While there has been no official confirmation from the government yet.
