Income Tax Slabs Budget 2025 Live Updates: Why New Tax Regime Is In Focus

The new tax regime, which offers fewer deductions, but lower taxation rates is in focus as around 72% of taxpayers have switched to it from the old tax regime. The government has made it the default tax regime, and has encouraged taxpayers to make the switch. The tweaks in new tax regime slabs, along with increase in standard deduction from Rs 50,000 to Rs 75,000, allowed taxpayers to save around Rs 17,400 annually, the government had said in July. Speculations are rife that the finance minister may announce measures that make the new tax regime more lucrative.

Income Tax Slabs Budget 2025 Live Updates: Taxpayers Need Enhanced Rebate, Says Expert

“Taxpayers are hoping for an enhanced rebate for lower-income individuals and an increase in the basic exemption limit under both tax regimes to help offset inflation,” said Chopra. “To help conserve taxpayers’ resources, the turnover limit for taxation on a presumptive basis under Sections 44AD (for businesses) and 44ADA (for professionals) should be increased,” he added.

Income Tax Slabs Budget 2025 Live Updates: Is HRA Taxable?

HRA is a part of your salary income. So, it is initially considered a part of your taxable income. However, if you live in a rented accommodation, you can claim a tax exemption. One can either do a partial or whole claim under Section 10 of the Income Tax Act. It is important to note that this is if one does not live in a rented accommodation, this allowance is fully taxable. Read more.

Income Tax Slabs Budget 2025 Live Updates: What Are The Benefits For Individual With Home Loans?

Under Section 80C, which is applicable under the old tax regime, the amount paid towards the principal of your home loan offers the benefit of tax deductions. The maximum housing loan tax exemption is Rs 1.5 lakh a year. One can avail these benefits if the evidence that the funds were used for the specific purpose can be given.

Further, if one takes a personal loan to renovate or repair their house, then they are eligible for a tax deduction under Section 24 of the Income Tax Act. One can claim deductions of up to Rs 30,000 per year on the interest paid on a personal loan. Read more

Countdown Underway For Sitharaman’s Budget Speech

Finance Minister Nirmala Sitharaman has departed from her residence. At 11 a.m., she will deliver her Budget speech in the Parliament. This will be the second full-year budget under the third tenure of Narendra Modi-led government.

How To Maximum Income Tax Savings Under Section 80C

  • ELSS funds on an average deliver 12% to 15% returns. These schemes also come in with a lock-in period of three years.

  • A unit-linked insurance plan, or a ULIP, will bring the investor an 8% to 10% interest. These units will have a five-year lock-in period.

  • Investing in a Public Provident Fund will return 7.90% interest. This investment comes with a lock-in period of 15 years as well.

  • Sukanya Samriddhi Yojana is also a scheme that taxpayers can invest in. This scheme gives an 8.50% interest.

  • NPS scheme, while is not covered under Section 80C, allows taxpayers to claim an additional deduction of Rs 50,000 under Section 80CCD (1B). This option can deliver with an 8% to 10% interest rate.

Section 80C Still Makes Old Regime Attractive For Scores Of Taxpayers

Section 80C broadly includes contributions to insurance premiums, public provident funds, employee provident funds, national savings certificates, equity-linked savings scheme mutual funds, children’s school fees, and payment of principal in housing loans, among other things.

An individual can invest up to Rs 1,50,000 every year. This can be claimed as a deduction every year from the gross total income of the taxpayer as well. It is also important to note that companies and partnership firms cannot avail themselves of the benefits of this deduction.

The Section 80C benefits are not available for taxpayers under the new tax regime.

Old Tax Regime: How Tax Slabs And Rates Are Currently Stacked Up

Under the old tax regime, taxpayers are levied a higher rate of tax on their income. However, they are allowed to claim higher deductions as compared to the new tax regime. In the 2024 Budget, no changes in the old tax regime were made. Here’s a look at the how the tax slabs and rates currently stand:

Existing Tax Slabs And Rates Under The New Tax Regime

Under the new tax regime, income up to Rs 3 lakh is exempted from taxation. The previous tax slab of Rs 3-6 lakh income, charged at 5%, was revised to Rs 3-7 lakh with the taxation rate remaining the same. The next slab of Rs 6-9 lakh was revised to Rs 7-10 lakh, with the rate remaining 10%. The last two slabs—Rs 12-15 lakh and Rs 15 lakh-plus—remained unchanged.

Income Tax Changes Budget 2025 Live: How New Tax Regime Was Tweaked In The Last Budget

The new structure levied no tax on income up to Rs 3 lakh. Income from Rs 3 lakh to Rs 7 lakh is taxed at 5% and income from Rs 7 lakh to Rs 10 lakh is taxed at 10%. Income from Rs 10 lakh to Rs 12 lakh is taxed at 15% and income from Rs 12 lakh to Rs 15 lakh is taxed at 20%. Income earned above Rs 15 lakh is taxed at 30%.

The first two income brackets have been extended by a lakh and the brackets of the last two slabs remain unchanged. The government had also announced an increase in the standard deduction to Rs 75,000 from Rs 50,000 during the last Union Budget. This move aimed to benefit salaried individuals, providing them with higher tax savings and greater disposable income.

Income Tax Changes Budget 2025 Live: Experts Bet On Benefit Based Changes In Taxation

While the probability of change in structure is limited, changes to benefit the tax payers have higher bets. “My expectation on the tax front is some relief for middle class taxpayers, especially in the new tax regime, by expanding the tax slabs,” said Arnav Pandya, founder of Moneyeduschool. Read more.

Income Tax Changes Budget 2025 Live: Will Tax On Long-Term Capital Gains Be Reduced?

In the 2024 Union Budget, the tax on long-term capital gains was increased from 10% to 12.5%, but the exemption limit was raised from Rs 1 lakh to Rs 1.25 lakh. This had drawn some criticism, as arguments were made that the increase in taxes may disincentivise people from investing in long-term asset classes.

Income Tax Changes Budget 2025 Live: Short-Term Capital Gains Tax In Focus

Apart from the personal income tax slabs, the focus of taxpayers during Finance Minister Nirmala Sitharaman’s Union Budget 2025 speech would be on any potential revisions in the short-term capital gains tax. In the Budget 2024, the STCG tax was raised to 20% from 15%. This covers the gains made on listed equity shares and mutual funds, and units of business trusts held for a short-term period, i.e. less than 12 months.

Income Tax Changes Budget 2025 Live: Simplification Expected

There is anticipation over likely measures to be announced in the Union Budget 2025 that can further simplify the taxation norms. The government is also expected to separately roll out the Direct Tax Code — the new income tax bill which will be aimed at simplifying compliance.

Income Tax Changes Budget 2025 Live: Relief On Cards?

Good morning, readers! Welcome to the NDTV Profit’s live blog coverage on income tax announcements in the Union Budget 2025, which will be presented today by Finance Minister Nirmala Sitharaman. Speculations are rife that some relief could be on the cards for the middle class, as the government might look to raise the disposable income to address the lull in urban consumption. Will the tax rates be tweaked, or slabs be revised? Will the new tax regime be made more lucrative? Will revisions be made to taxes on long-term and short-term capital gains? Stay tuned here to find out.

. Read more on Budget by NDTV Profit.Income Tax Changes Budget 2025: Speculations are rife that tweaks could be made to the new tax regime—through changes in taxation rate or revision in tax slabs—to raise the disposable income.  Read MoreBudget, Personal Finance, Economy & Finance 

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