What changes are recommended by economists for salaried taxpayers?
Budget 2025-26: What Can the Salaried Class Expect?
As Finance Minister Nirmala Sitharaman gears up to present Budget 2025-26 on February 1, the salaried class in India is eagerly anticipating any potential relief measures that may be announced. The perennial question that arises during every Budget season is whether there will be any provisions specifically targeting the salaried individuals to ease their financial burden.
Potential Changes in Tax Exemption Limits and Standard Deductions
Economists have been advocating for an increase in the tax exemption limit and standard deduction under the new tax regime in order to provide relief to a large number of taxpayers. In the previous Budget, the standard deduction was raised to Rs 75,000 from Rs 50,000, while the exemption limit currently stands at Rs 3 lakh under the new regime. Experts believe that further enhancements in these areas could benefit the salaried class significantly.
Focus on Tax Benefits for Electric Vehicles and Real Estate
Additionally, there is speculation about potential tax benefits for electric vehicles, measures to boost the housing sector, and simplification of processes related to the purchase and sale of real estate for Non-Resident Indians (NRIs). These initiatives could not only stimulate economic growth but also provide relief to taxpayers in specific sectors.
Challenges Faced by Salaried Individuals
Deepika Mathur, Director at Deloitte India, highlighted the challenges faced by salaried individuals in India, particularly in terms of tax burden. She emphasized that the current tax system disproportionately affects the middle class, with salaries being taxed more heavily compared to other forms of income. Addressing these disparities and ensuring a fair tax system is a key consideration for policymakers.
Facilitating Tax Payments from Overseas Bank Accounts
Another crucial aspect that experts believe should be addressed in the upcoming Budget is facilitating tax payments from overseas bank accounts. Currently, individuals residing abroad or holding foreign accounts may face challenges in making tax payments for their Indian income. Streamlining this process and allowing for tax payments from overseas accounts would enhance compliance and ease the burden on taxpayers.
Anticipation for Transformation in Taxation Landscape
As the Budget date approaches, there is anticipation around whether the announcements on February 1 will bring about significant changes in the taxation landscape in India. The middle class, in particular, is hoping for meaningful reforms that will enhance their purchasing power and ease their tax burden. Whether the Budget will meet these expectations or leave the middle class wanting more remains to be seen.