Representative image: With the well-awaited Budget 2025, the salaried individuals would be expecting some relief to the tax costs they bear on the salary income.
Credits: iStock Photo
Finance Minister Nirmala Sitharaman will present the 8th consecutive Union Budget on February 1, 2025. Reports suggest that the government is mulling over cutting income tax for those who are earning up to Rs 15 lakh a year in February's budget, in turn providing relief to the middle class.
Taxpayers have pinned high hopes on the Union Budget FY 2025-26 documents and are keeping their fingers crossed regarding their expectations from the government's most important financial document of the year.
This is what Santhosh Sivaraj, Partner, Global Employer Services, Tax & Regulatory Services, BDO India has to say--
Standard Deduction Limit
"With the well-awaited Budget 2025, the salaried individuals would be expecting some relief to the tax costs they bear on the salary income. With the introduction of the New Tax Regime in recent years, in the 2024 budget, the Hon’ble Finance Minister (FM) announced the allowability of an increased standard deduction of INR 75,000 per annum for those who opt for New Tax Regime as against INR 50,000 per annum who opt for Old Tax Regime.
Standard deduction was abolished in the Financial Year (FY) 2005-06 and Late Hon’ble FM, Arun Jaitley reintroduced standard deduction in the 2018 budget.
As per the 2018 budget speech, the Late Hon’ble FM mentioned “To provide relief to salaried taxpayers, I propose to allow a standard deduction of INR `40,000/- instead of the present exemption regarding transport allowance and reimbursement of miscellaneous medical expenses....Apart from reducing paperwork and compliance, this will help middle-class employees even more in reducing their tax liability...
While in Financial Year 2018-19, there were no two separate tax regimes, INR 40,000 was reintroduced as a standard deduction towards transport allowance and miscellaneous medical expenses.
Owing to the inflation and increase in prices in both transport and medical since FY 2018-19 since the time standard deduction was reintroduced, the Hon’ble FM should look at bringing in parity for those opting for either the Old or the New Tax Regime and increase the standard deduction to a minimum of Rs 1.20 lakhs a year. This would seem practical as any salaried taxpayer would be incurring Rs 10,000 a month / INR 1.20 lakhs a year collectively towards transport and medical expenses."
Union Budget 2025 | Nirmala Sitharaman, who continues to be Finance Minister, will present her record 8th Union Budget this time. While inflation has burnt a hole in the pockets of 'aam janata', reports suggest there might be a tax relief for those making up to Rs 15 lakh per year. Track the latest coverage, live news, in-depth opinions, and analysis only on Deccan Herald. Also follow us on WhatsApp, LinkedIn, X, Facebook, YouTube, and Instagram.