Income Tax Budget 2025 Expectations Highlights: Income tax breaks for middle class, changes in tax slabs, standard deduction, 87A rebate hike in Union Budget 2025-26? (original) (raw)

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31 Jan 2025 | 11:04:35 PM IST

FM Nirmala Sitharaman will present her eighth consecutive Union Budget in the parliament tomorrow, February 1, 2025.

Synopsis

Budget 2025 Income Tax Expectations Highlights: Union Finance Minister Nirmala Sitharaman will present the budget for FY 2025-26 tomorrow, on Feb 1, 2025, at 11 am. Ahead of the budget, the Indian middle class and taxpayers are hoping that this budget might bring about some major income-tax-related breaks and reliefs for them. Changes are expected in the form of tax slabs in new tax regimes, along with a hike in standard deductions and rebates offered under Section 87A

Union Budget 2025 Income Tax Highlights: FM Sitharaman will present the Union Budget on Saturday, February 1, 2025. Taxpayers are hoping that FM Sitharaman will introduce new income tax slabs under the new tax regime and deductions and exemptions in the new tax regime, such as making annual income of up to Rs 10 lakh tax-free and introducing a new tax slab for those with an annual income of between Rs 15,00,000 and Rs 20,00,000

Where to watch FM Nirmala Sitharaman present the Union Budget 2025-26?
Today, FM Nirmala Sitharaman will table the Economic Survey in Lok Sabha. FM Nirmala Sitharaman will present her eighth consecutive Union Budget tomorrow, i.e. on Saturday, February 1, 2025, at around 11 am in the parliament. You can watch the live proceedings of the union budget on the government’s official union budget website, indiabudget.gov.in. You can also catch FM Nirmala Sitharaman delivering her budget speech on the YouTube and TV channels of Sansav TV. The YouTube channel of PIB (Press Information Bureau) will also broadcast the live speech, which will begin around 11 am.

Expectations of hike in standard deduction limits under old and new tax regime
Taxpayers are wishing for a hike in the standard deduction limit under both tax regimes. Currently, while the old tax regime offers a standard deduction of Rs 50,000, under the new tax regime, taxpayers can claim a standard deduction of up to Rs 75,000. Taxpayers are also demanding more exemptions and deductions under the new tax regime. Given that the government is looking to make the new regime more attractive, chances of any benefits being introduced in the old tax regime are slim.

When will Union Budget 2025-26 be presented?
FM Nirmala Sitharaman will present her eighth consecutive Union budget under Modi 3.0 on Saturday, February 1, 2025. The FM will table the budget in Loksabha at around 11 am. Sitharaman will present the Economic Survey today i.e. on January 31, 2025.

Will direct tax code be introduced in this Budget 2025-26?
The government is also expected to introduce the Direct Tax Code in this budget session. The aim of this is to simplify the 63-year-old Income Tax Act and make it easier for taxpayers to understand and comprehend income tax.

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Union Budget 2025 Income Tax Highlights: Will first-time homebuyer income-tax benefits get a much-needed boost by FM Nirmala Sitharaman in Union Budget 2025-26

India Budget 2025 Income Tax live Updates: While the old tax regime offers multiple tax benefits in terms of home loan repayment deductions, which aid taxpayers to buy their own homes, the new tax regime is noticeably devoid of them. To facilitate taxpayers in the new tax regime to own their house, Pushpamitra Das, Founder & Director, JUSTO suggests the following:

Union Budget 2025 Income Tax Highlights: What will FM Nirmala Sitharaman have in store for first-time home buyers in Union Budget 2025-26?

India Budget 2025 Income Tax live Updates: As we inch closer to the Union Budget presentation tomorrow, i.e., February 1, 2025, first-time home owners are eagerly anticipating major income tax reliefs that will financially empower them to buy their own homes.

As per Aryan Singh, Marketing Head, BRIC-X INFRA PVT. LTD, "As we approach the Union Budget 2025, the real estate sector expects the government to emphasize the steps that can energize the dreams of thousands of first-time homebuyers. The housing market is central to any economic growth, and first-time buyers are its driving force. Policymakers should come up with the necessary reforms to make homeownership accessible and affordable. In addition, an extension of the ₹1.5 lakh deduction under Section 80C on principal repayment or an independent limit exclusively for housing will encourage more people to invest in property. Another pivotal area is increasing the allocation for credit-linked subsidies under the PMAY (Pradhan Mantri Awas Yojana). Simplifying processes and raising eligibility caps can help more first-time buyers access financial assistance."

Union Budget 2025 Income Tax Highlights: Income tax breaks for middle class, changes in tax slabs, standard deduction, 8: Will FM Nirmala Sitharaman create a separate deduction category for life and health insurance premiums in old tax regime, apart from Section 80C?

India Budget 2025 Income Tax live Updates: At present, deductions for life insurance premiums can be claimed under the Rs 1.5 lakh comprehensive limit available under Section 80C, which also includes deductions for PPF, NPS, and home loan principal repayment and more. Taxpayers are seeking a separate section which will allow them to claim deductions for health and life insurance premiums over and above the Section 80C limit.

As per Shilpa Arora, Co-Founder & COO, Insurance Samadhan, "Consumers are seeking an increase in the health insurance deduction limit from Rs 50,000 for individuals and Rs 1,00,000 for senior citizens to protect themselves against rising healthcare costs without financial limitations. Similarly, some have voiced concerns that the deduction limit of up to Rs 1.5 lakh under Section 80C is inadequate, and a separate category for insurance products could promote insurance adoption. There’s also an urgent need to remove taxes on annuity principal and earnings to promote retirement planning among aging consumers. Such a reform could allow policy buyers to focus more on their retirement planning and help insurance companies sell more products, benefitting both parties."

Union Budget 2025 Income Tax Highlights: Will FM Nirmala Sitharaman hike the basic exemption limit under both new and old tax regimes in Union Budget 2025-26?

India Budget 2025 Income Tax Live Updates: The current basic exemption limit is Rs. 2.5 lakh under the old tax regime and Rs. 3 lakh under the new regime. It is notable that the basic exemption limit was last increased to Rs. 2.5 lakhs in 2014 under the old tax regime.

As per CA (Dr.) Suresh Surana, "Increase in basic exemption limit to Rs. 3.50 lakhs in the old tax regime from the current Rs. 2.50 lakhs is necessary keeping in view inflation. Non-revision of basic exemption limit for past several years is inadequate considering the year-on-year increase in inflation and the resulting increase in the cost of living. Therefore, there is a need for raising this limit to Rs. 3.5 lakhs for both tax regimes. This adjustment would provide relief to taxpayers and better align with prevailing economic conditions, ensuring a fairer and more equitable tax structure."

Union Budget 2025 Income Tax Highlights: Will FM Nirmala extend Section 80C benefits to REIT and InvITs investors in this Union Budget 2025-26?

India Budget 2025 Income Tax live Updates: REITS, or real estate investment trusts, are rapidly emerging as popular ways for investors to invest in real estate without having to make a significant investment, which is generally required in real estate. REITs and InvITs allow investors to put money in income-generating assets, with the subsequent income distributed as dividends amongst them.

According to Anshuman Magazine, Chairman & CEO, India, Southeast Asia, Middle East & Africa, CBRE, "While recent tax reforms for REITs and InvITs, such as reducing the long-term capital gains holding period from 36 to 12 months, are commendable, further incentives are needed. Extending Section 80C tax benefits to REIT investors would encourage wider participation and strengthen these investment vehicles. A key area for reform is the tax deduction limits under Sections 80C and 24(b) of the Income Tax Act. The current limits of Rs 1.5 lakh and Rs 2 lakh per annum do not align with rising property prices. Increasing these to Rs 4 lakh and Rs 5 lakh, respectively, would provide meaningful relief to homebuyers, especially in the initial years of loan repayment."

Union Budget 2025 Income Tax Highlights: Can taxpayers expect deductions available under Section 80E to be extended to the new tax regime in Union Budget 2025-26?

India Budget 2025 Income Tax live Updates: Education loan interest deduction is available for individuals paying interest on education loans for themselves, their spouses, or children for 8 years, under Section 80E of the Income Tax Act. However, this deduction is unavailable in the new tax regime.

According to Sapna Malya, Professor, Finance and Economics, S.P. Jain Institute of Management and Research (SPJIMR), "the interest deductions should be offered even after 8 years till the complete loan amount is repaid. Most often parents take this loan for a tenure of more than 8 years and have to bear the burden of principal and the interest amount for a longer duration without the tax benefit. To ensure access to quality education for all, extending the benefits of education loan interest deduction to the new tax regime could encourage individuals to pursue costly courses by financing them through loans."

Union Budget 2025 Income Tax Highlights: Income tax breaks for middle class, changes in tax slabs, standard deduction, 8: Will FM Nirmala Sitharaman reduce the 1% TDS presently applicable on transactions undertaken in VDAs (virtual digital assets) like cryptocurrencies?

India Budget 2025 Income Tax live Updates: At present, the gains arising from the transfer of virtual digital assets (“VDAs”) like cryptocurrencies and non-fungible tokens are taxable at a flat rate of 30%. Also, there is no provision for any deductions, carryforwards, or set-offs of losses on the transfer of VDAs.

"With the increase in VDA transactions, it is only fair to align the taxation of VDAs with other capital assets by levying tax on the capital gains arising on their transfer as short-term or long-term capital gains at a slightly higher rate (say 15% and 25%) and allowing carryforward and setting-off of losses. The period of holding of the VDAs should also be 24 months as per the other asset classes. Further, the TDS on VDA transactions should also be reduced from the exorbitant 1% to at least 0.1%", says SR Patnaik, Partner (head of taxation), Cyril Amarchand Mangaldas

India Budget 2025 Income Tax live Updates: Ahead of the Union Budget 2025-26, taxpayers are hoping for significant simplifications and streamlining of litigations and compliances related to Income tax. Says Mr. Ashish Agrawal, Partner, Dhruva Advisors, "We anticipate measures aimed at simplifying tax compliance and expediting dispute resolution mechanisms, particularly at the faceless Commissioner of Income Tax (Appeals) levels, as there has been no significant progress in appeal disposals over the past 2-3 years. Implementing these measures would enhance the ease of doing business and build taxpayer trust."

Per a KPMG survey on direct tax simplification, 61% of the over 200 surveyed respondents prefer a hybrid model for interactions with tax officials (part faceless, part physical meetings). 35% support the full transition to faceless mode, but 4% still prefer offline interactions. Also, 87% advocate removing mandatory TDS certificate issuance, as the same information is already available in Form 26AS. 64% suggest that TDS credit should be given based on Form 26AS, regardless of when the corresponding income is taxed.

Union Budget 2025 Income Tax Live: How can FM Nirmala Sitharaman increase the disposable income in the hands of income taxpayers?

India Budget 2025 Income Tax Live Updates: As per experts, Budget 2025 might focus on boosting the purchasing power of the middle class, which will drive increased investments and consumption, ultimately encouraging economic growth.

According to CA Jigar Suba, "to enhance disposable income and stimulate consumption, the government could consider the following tax reforms aimed at benefiting individual taxpayers:

  1. Adjust House Rent Allowance (HRA) Deductions: Aligning HRA deductions with rising urban rent costs would help individuals manage their housing expenses more effectively.
    2. Exempt Tax on Interest Receipt from Fixed Deposits: Given that post-tax returns on fixed deposits are often below inflation rates, exempting interest income up to a certain limit from tax would encourage savings and strengthen financial security.
    3. Raise Rebate Limit Under Section 87A: Increasing the rebate limit to Rs 10 lakh would provide immediate tax relief to middle-class taxpayers, boosting their disposable income.
    4. Reduce the Highest Surcharge Rate to 25%: Capping the highest surcharge at 25% instead of the current 37% would reduce the tax burden on high-income earners, thereby increasing their purchasing power.
    5. Increase Standard Deduction for Salaried Individuals: Raising the standard deduction to Rs 1.50 lakh would provide significant relief to the salaried class, especially given the limited deductions available under the current tax regime.
    6. Increase Home Loan Interest Deductions: Raising deduction limits for first-time or single homebuyers would alleviate the financial burden of home loan interest, particularly in high-cost cities like Mumbai.

Union Budget 2025 Income Tax Live: Will FM Nirmala Sitharaman announce income tax measures that will leave more money in the hands of taxpayers?

India Budget 2025 Income Tax live Updates: With the budget presentation approaching tomorrow, most taxpayers are eagerly anticipating that FM Sitharaman will introduce major income-tax-related measures that will leave people with more in-hand disposable income, which, in turn, will also accelerate the sluggish urban consumption. This includes making annual income of up to Rs 10,00,000 tax-free and other measures.

Ashish Agrawal, Partner, Dhruva Advisors, says that middle-class taxpayers are experiencing reduced disposable income due to high taxes, inflation, and rising living expenses. "Revisions to tax slabs and deductions under Section 80C have not been updated for many years and are due for revision in line with inflation rates. The tax-free income threshold should be increased to Rs 10 lakh, with a 10% rate for income up to Rs 20 lakh, a 20% rate for income up to Rs 30 lakh, and a 30% rate for incomes above Rs 30 lakh. The Section 80C deduction limit can be increased to Rs 5 lakh, and the standard deduction for salaried individuals can be based as a percentage of salary, say 10% or 20%. Likewise, higher exemption limits should be set for senior and super senior citizens", he adds.

India Budget 2025 Income Tax live Updates: Under Section 80E of the Income Tax Act, those opting for the old tax regime can claim a deduction on the interest part of the loan specifically availed for higher education purposes. However, this benefit can only be availed for a maximum of 8 years or till the time the entire interest amount is paid, whichever is earlier.

According to Prof. Arvind Sahay, Director, MDI Gurgaon, "Expanding the scope of education loan interest deductions under Section 80E can provide crucial relief to middle-class households, making higher education more attainable. A longer deduction period or increased exemption limits would alleviate the financial burden on students pursuing advanced degrees, particularly in high-cost fields such as management, medicine, and technology. Streamlining tax exemptions for scholarships will ensure that financial aid directly supports learners without incurring additional tax implications. Furthermore, tax relief on employer-sponsored education programs could encourage corporate investment in skill development, aligning workforce competencies with industry needs," he adds.

Union Budget 2025 Income Tax Live: Can taxpayers expect FM Nirmala Sitharaman to introduce new income tax slabs in the new tax regime in Budget 2025-26?

India Budget 2025 Income Tax Live Updates: With the budget presentation tomorrow, hopes are rife that FM Nirmala Sitharaman will hand out significant income-tax-related breaks to middle-class and salaried taxpayers. On top of this list is the introduction of a new tax slab between Rs 15-20 lakh in the new tax regime.

Says Ajay Lakhotia, Founder & CEO, StockGro, 'One of the key expectations frm this Budget is the introduction of a new 25% tax slab for incomes between Rs 15 lakh and Rs 20 lakh under the old regime. This move would ease the jump from 20% to 30%, encouraging higher compliance and providing relief to India’s growing middle class. Additionally, revisiting the surcharge structure for incomes above Rs 5 crore can ensure equitable contributions without discouraging wealth creation."

Union Budget 2025 Income Tax Live: Will FM Nirmala Sitharaman hike the basic income exemption limit from Rs 3,00,000 in the new tax regime in Union Budget 2025-26?

India Budget 2025 Income Tax live Updates: Under the old tax regime, the basic income exemption limit is set at Rs 2,50,000 for those aged under 60, while for those opting for the new tax regime, the limit is set at Rs 3,00,000.

Says Saurabh Ashok More, Group Chief Financial Officer, CIEL HR Group, "Over the last decade, All India CPI has grown by 1.64 times from Jan 2015 (119.5 points) to Dec 2024 (195.4 points), while the basic exemption limit for individuals has not moved similarly to ₹4.1 lakh from ₹2.5 lakh. This stagnation has eroded the purchasing power of the average taxpayer by 27-39% under both the tax regimes. The new regime, with fewer deductions but lower rates, remains less beneficial due to inadequate exemption increases. Both require reforms, including inflation-adjusted slabs and proportional standard deductions for equitable relief.

Union Budget 2025 Income Tax Live: Will Union FM Nirmala Sitharaman hike the repayment tenure presently available under the education loan for deduction purposes?

India Budget 2025 Income Tax live Updates: At present, taxpayers can claim a deduction on the interest portion of the educational loan taken for higher education for a maximum of 8 years. As we approach the Union Budget 2025-26 presentation, taxpayers want a hike in this allowed tenure of repayment.

Says Shreevats Jaipuria, Chair, PHDCCI Education Committee, "Interest on education loans is deductible under Section 80E from the year of the repayment. Maximum duration allowed for repayment is eight years, and it can be taken only for higher education of self, spouse, own child, or a child for whom the individual is a guardian. While there are set limits for unsecured loans, banks give loans of as high an amount as Rs 1.5-Rs 2 crore in select cases for study abroad against collateral. One area where some tweak is possible is the duration of repayment, which can be increased from eight to 15 years so that there is no untoward burden on the student immediately after entering the workforce."

Union Budget 2025 Income Tax Live: AI is poised to disrupt work, jobs, and the workforce, and India must accelerate its efforts to stay ahead of this rapid transformation, says Deloitte India on Economic Survey

India Budget 2025 Income Tax live Updates: The Economic Survey, which was released today, threw a spotlight on how AI (artificial Intelligence) is set to disrupt the Indian labor market and that India will need robust enabling, insuring, and stewarding institutions to stay ahead of the curve.

"The right infrastructure and safety will go a long way in quick adoption of the new frontier technologies by both the industry and the workforce. Again, careful and long-term deployment will help them make the work force more agile and broad base societal benefits. As rightly pointed out, there is a need to coordinate efforts between the government, private sector, and academia to shape a future of work where AI enhances, rather than replaces, human labor."

Deloitte also highlighted the potential role the textile industry can play in generating employment. "Amidst the run to be a semiconductor hub, India will have to create employment opportunities, and here industry such as textile holds great promises. As India aims to create 78.5 lakh new non-farm jobs annually until 2030, the textile industry, a long-standing pillar of India’s manufacturing sector, can play a crucial role. Contributing 11% to the country’s manufacturing GVA, the sector must evolve with the global shift from cotton to man-made fibers. Man-made fiber production offers the potential for vertical integration, which could be transformative for India."

Union Budget 2025 Income Tax Live: AI is poised to disrupt work, jobs, and the workforce, and India must accelerate its efforts to stay ahead of this rapid transformation, says Deloitte India on Economic Survey

Union Budget 2025 Income Tax Live: Major Income Tax breaks for home owners and potential home buyers on the cards in this Union Budget 2025-26?

India Budget 2025 Income Tax Live Updates: At present, a house having a carpet area up to 60 sqm in metros and 90 sqm in non-metros with a house value of up to Rs 45 lakh comes under the category of affordable housing. As we approach Budget 2025, experts are hopeful that this definition will be revised upwards.

Notes Anshuman Magazine, Chairman & CEO, India, Southeast Asia, Middle East & Africa, CBRE, "In affordable housing, we recommend expanding Pradhan Mantri Awas Yojana (PMAY) eligibility by increasing the upper property price limit from Rs 45 lakhs to Rs 75 lakhs in metro cities and raising the carpet area threshold to 90 sq. m. Such measures would make the scheme more inclusive and aligned with regional pricing. The current limits of Rs 1.5 lakh and Rs 2 lakh per annum do not align with rising property prices. Increasing these to Rs 4 lakh and Rs 5 lakh, respectively, would provide meaningful relief to homebuyers, especially in the initial years of loan repayment."

Union Budget 2025 Income Tax Live: Major Income Tax breaks for home owners and potential home buyers on the cards in this Union Budget 2025-26?

Union Budget 2025 Income Tax Live: Will FM Nirmala Sitharaman make taxpayers looking to buy their own house happy in the Union Budget 2025-26?

India Budget 2025 Income Tax live Updates: At present, the old tax regime is far more beneficial in terms of offering home-loan-related deductions as compared to the new tax regime. The new tax regime only offers interest deductions on home loans taken for let-out or rented property.

Explains Kunal Savani, Partner, Cyril Amarchand Mangaldas, The government may consider introducing new benefits for the construction and/or purchase of a new residential house, especially for first-time homebuyers, in order to provide a boost to the real estate sector and make housing more affordable for the common man. Deductions available for payment of home loan interests under Section 24(b) of the Income Tax Act, 1961 (“IT Act”) may also be increased from the current Rs 2 lakhs to Rs 4 lakhs. In case 100% tax benefit is not feasible, the Government may consider other incentives like obtaining funding at lower interest rates, etc.

Union Budget 2025 Income Tax Live: Can taxpayers expect additional income tax breaks from FM Nirmala Sitharaman in Union Budget 2025-26?

India Budget 2025 Income Tax Live Updates: Taxpayers could claim a deduction of up to Rs 1,50,000 on the interest portion of a loan taken specifically to purchase an EV, or electric vehicle, if their loan had been sanctioned between January 2019 and March 2023. To boost EV adoption in the country, taxpayers are hoping that this deduction would be reintroduced by FM Sitharaman in this budget

Says Rajnikant Behera, Executive Director, RSB Group, "As we approach Union Budget 2025, we look forward to policy measures that strengthen India’s EV ecosystem. Reinstating tax benefits like the Rs 1.5 lakh deduction on EV loan interest under Section 80 EEB, which expired in March 2023, would make EVs more affordable and accelerate adoption."

Union Budget 2025 Income Tax Live: Big income tax relief coming? President Draupadi Murmu hints towards benefits for middle class in her budget session address

India Budget 2025 Income Tax Live Updates: Ahead of FM Nirmala Sitharaman presenting the Union Budget 2025-26 in the parliament tomorrow, President Draupadi Murmu has hinted that significant income-tax-related reliefs might be coming the middle-class Indian's way in this budget. In her address to the parliament while kickstarting the budget session, Murmu highlighted that "the economic progress of India is deeply tied to the aspiration of the middle class and its fulfillment.". Will this budget put the financial desires of the middle class on the fast- track? Stay tuned to ET Wealth for more updates.

Union Budget 2025 Income Tax Live: Can taxpayers expect additional income tax breaks from FM Nirmala Sitharaman in Union Budget 2025-26?

India Budget 2025 Income Tax live Updates: Ahead of the Budget 2025-26, income taxpayers are expecting significant tax breaks from FM Nirmala Sitharaman. Most prominent amongst such demands is increasing the threshold presently available under Section 80C, which offers a combined deduction limit of Rs 1.5 lakh for various investments such as contributions to ELSS, NPS, home loan principal repayment, and more.

Santosh Joseph, Co-founder and CEO of Germinate Investor Services, says that the upcoming budget should introduce additional tax breaks, similar to those under Section 80C, which include investments in equity-linked savings schemes (ELSS) and insurance. "Expanding these provisions to include new categories or increasing the limits could provide much-needed relief to taxpayers. An increase in the income tax slab levels or the introduction of new slabs could also offer targeted tax benefits for specific investments or savings, which would motivate people to save more and benefit from tax exemptions," he adds.

India Budget 2025 Income Tax Live Updates: With the budget session 2025 kicking off today, experts are hopeful that FM Sitharaman will table the DTC (direct tax code) in the parliament, which aims to simplify the existing Income Tax Act. The 63-year-old act currently has around 298 sections, making it a very complex piece of legislation.

Says Ajit Shah, Partner, Direct Tax, N.A. Shah Associates, "the Finance Minister is expected to announce much-awaited provisions for Rationalization & Simplification of the Act. It is also expected that the provisions that have led to considerable litigation in the past, particularly with regard to the reopening of the assessments, shall be amended by removing the legal and practical implementation issues. Taxpayers’ friendly provisions need to be introduced to enable the taxpayers to get their grievances resolved faster than at present, particularly with regard to refunds and adjustment of refunds against pending assessments, as they have resulted in substantial litigation in the recent past.”

Union Budget 2025 Income Tax Live: Will Union Budget 2025-26 extend tax benefits to NPS contributions and pension plans?

India Budget 2025 Income Tax live Updates: At present, most senior citizens in the country are largely dependent on NPS, pension products, annuities, and other retirement-centric products to fund the twilight years of their lives. As such, it is neccesary that withdrawals on these investment products be made entirely tax-free

According to Prashant Tripathy, MD & CEO, Axis Max Life Insurance, "With Budget 2025 set to be presented tomorrow by the Hon'ble Finance Minister, we are optimistic about the introduction of initiatives aimed at enhancing the financial independence of senior citizens. A key step in this direction could be encouraging senior citizens to invest in the National Pension Scheme (NPS) or annuity/pension plans, ensuring a steady income stream. We expect the government to extend tax benefits for NPS contributions to insurance pension plans, along with making income received from these sources tax-free."

Union Budget 2025 Income Tax Live: What deductions can the middle class expect the Union Budget 2025-26 to introduce?

India Budget 2025 Income Tax Live Updates: At present, the old tax regime offers around 70 exemptions and deductions to the taxpayers, while the new tax regime offers minimal exemptions and deductions in exchange for offering multiple income tax slabs and lower income tax rates. Ahead of the Budget, taxpayers are expecting a hike in the home loan interest deduction Section 24(b), which is currently capped at Rs 2 lakh and in which home loan borrowers would see some advantage. Additionally, a raise in the standard deduction for salaried employees, which has been a meager sum of Rs 50,000, is also on the cards, which would help employees meet their daily expenditures.

Says Sourabh Deorah, Co-founder & CEO, AdvantageClub.ai, "The Budget 2025 will be here soon, and we remain optimistic that some changes will come about to make the lives of salaried employees easier. One major thing we wish for is better deductions on taxes under Section 80D—not just for health and life insurance but widened to include wellness. Apart from wellness, several other important areas can bring tax support to salaried employees. One huge expectation is an enhancement in the limit for Section 80C, which is currently capped at Rs 1.5 lakh. Raising this would enable a larger amount of savings in PPF, EPF, and life insurance. Similarly, the Section 80D deduction of health and life insurance, which currently stands at Rs 25,000 (Rs 50,000 in case of senior citizens), can be widened as per contemporary needs of healthcare."

Union Budget 2025 Income Tax Live: Will first-time homebuyers see some relief on the property tax front ahead of Budget 2025-26?

India Budget 2025 Income Tax Live Updates: Property taxes, levied by municipal authorities, depend on the value of the property and can become a significant financial burden on the homebuyers.

As per Sahil Verma, COO of Shray Projects, "On the property tax front, we anticipate rationalization of rates across metropolitan areas and tier-2 cities to ensure uniformity and fairness. A simplified property tax structure, potentially linked to carpet area rather than circle rates, could improve transparency and compliance. The government might also consider introducing green building incentives through property tax rebates.".

Union Budget 2025 Income Tax Live: Will FM Nirmala Sitharaman introduce a new tax slab under the new tax regime in Union Budget 2025-26?

India Budget 2025 Income Tax live Updates: With Nirmala Sitharaman set to present the Union Budget tomorrow, hopes are high that there might be significant changes made to income tax slabs under the new tax regime. Taxpayers are also anticipating that FM Sitharaman may also make annual income of up to Rs 10 lakh tax-free under the new regime.

According to Prabhakar K S, Founder & CEO, Shree Tax Chambers, "a new slab of Rs 8-10 lakh would meet the criteria of Economically Weaker Sections (EWS) while also addressing disparities between two thresholds. Additionally, the FM should introduce a new tax rate at 25% and abolish 30% for those earning above Rs 20 lakh.

As per Prabhakar, the new tax regime could potentially look like this post Budget 2025-26:

Union Budget 2025 Income Tax Live: Will Union Budget 2025-26 hike the rates of surcharges currently applicable to salaried individuals?

India Budget 2025 Income Tax Live Updates: Surcharges are additional levies charged on individuals whose annual income exceeds a certain threshold. In India, a surcharge is applicable if an individual's annual income exceeds Rs 50,00,000. Here are the present rates of surcharges levied on individual taxpayers in India:

Union Budget 2025 Income Tax Live: Will FM Nirmala Sitharaman bring back indexation benefits on long-term capital gains tax and revise short-term capital gains tax in Budget 2025-26?

India Budget 2025 Income Tax live Updates: Last budget, FM Nirmala Sitharaman had done away with indexation benefits on long-term capital gains tax, hiking the long-term capital gains tax from 10% previously to 12.5%, sans any indexation benefits. As for short-term capital gains, it was also hiked from 15% to 20%.

Notes Karan Virwani from Embassy Group, "The upcoming Union Budget should consider the reinstatement of indexation benefits for the Long-Term Capital Gains (LTCG) tax on real estate investments. This adjustment would align tax policies with inflation, ensuring a fairer tax treatment for property investors and home sellers. Similarly, reevaluating the Short-Term Capital Gains (STCG) tax structures could enhance market liquidity and support more dynamic investment cycles."

Union Budget 2025 Income Tax Live: What is in store for cryptocurrencies in Union Budget 2025-26?

India Budget 2025 Income Tax live Updates: Ahead of the Union Budget 2025-26, the crypto community in India is looking towards FM Nirmala Sitharaman to reduce the harsh taxes levied on virtual digital assets such as cryptocurrencies. The current tax regime has raised concerns, particularly the 30% tax on virtual digital assets and the 1% TDS, which have led many traders to move their activities to international platforms.

According to Thangapandi Durai, CEO, Koinpark, "A reduction in tax rates and TDS would definitely help in boosting compliance and prevent traders from migrating to foreign exchanges. Additionally, allowing crypto investors to offset their losses against gains, like in traditional markets, would encourage more participation and bring much-needed clarity. We hope that the Finance Ministry and FM Nirmala Sitharaman take these points into account, as a balanced approach will help India lead the way in the global blockchain and crypto ecosystem."

Union Budget 2025 Income Tax Live: Economic Survey hints towards potential job losses due to rapid developments in Artificial Intelligence (AI)

India Budget 2025 Income Tax live Updates: According to the Economic Survey, "The present discourse on AI from international organisations and social science researchers postulates that large-scale labor market disruptions due to AI may materialize in the near term. The International Monetary Fund states that AI poses risks of job displacements, notably for emerging markets and developing economies, which are not well placed to leverage the technology relative to the advanced economies."

Further, it cites the International Labour Organisation, which estimates that nearly 75 million jobs globally are at complete risk of automation due to AI. Estimates for the UK show that 7% of the existing UK jobs face a high risk of automation in the near term, rising to around 18% after 10 years. Industry experts have told media outlets that ‘AI models could dramatically disrupt the labor market, including replacing routine jobs in some sectors. A study by the Bank for International Settlements finds that 45% of the jobs in the upper quartile of the wage distribution remain exposed to AI in the United States. If AI becomes highly capable, exposure increases across all quartiles of the income distribution.

The Economic Survey further notes that estimates from private sector firms paint a similar picture. Goldman Sachs economists state that nearly 300 million full-time jobs remain exposed to AI-driven automation. McKinsey estimates demonstrate how, by 2030, up to 30% of current work hours could be automated by generative AI across Europe and the United States.

Union Budget 2025 Income Tax Live: Will Union Budget 2025-26 hike the standard deduction limit of Rs 75,000 under the new tax regime?

India Budget 2025 Income Tax live Updates: During Budget 2024, FM Nirmala Sitharaman hiked the standard deduction allowed to taxpayers opting for the new tax regime from its previous limit of Rs 50,000 to Rs 75,000. However, the standard deduction limit under the old tax regime has remained stable at Rs 50,000 for a long time.

Says Saurabh Ashok More, Group Chief Financial Officer, CIEL HR Group, "Presently, this deduction under the old regime stands at Rs 50,000 annually, irrespective of the level of salary income. While this is beneficial, it unfairly treats taxpayers earning widely different incomes at the same time. For instance, a taxpayer earning Rs 3 lakh per annum enjoys the same deduction as one earning Rs 30 lakh. This static deduction fails to account for the varying expenses associated with different
income levels.

"We propose setting the standard deduction at 5% of the gross salary income of individuals. This approach offers a proportional relief to taxpayers across different income levels, ensuring greater equity. For example, an individual earning Rs 6 lakh would receive a deduction of Rs 30,000, whereas a high-income earner making Rs 20 lakh would be eligible for Rs 1 lakh, thereby better reflecting their economic standing", he adds.

Union Budget 2025 Income Tax Live: Dip in insurance penetration in India; however, insurance density sees an uptick, says Economic Survey

India Budget 2025 Income Tax live Updates: The Economic Survey noted a slight decline in insurance penetration from 4% in FY23 to 3.7% in FY24. Life insurance penetration saw a marginal drop from 3% in FY23 to 2.8% in FY24. On the other hand, non-life insurance penetration remained stable at 1%. Notably, insurance penetration is the percentage of total premiums collected to the Gross Domestic Product (GDP) of a country.

"Insurance density in the country saw a modest rise from 92inFY23to92 in FY23 to 92inFY23to95 in FY24. Non-life insurance density increased from 22to22 to 22to25, while life insurance density remained consistent at $70. This growth in insurance density has been on an upward trajectory since FY17," it added. Insurance density is the amount of insurance premiums that is collected per person in a country. To get the insurance density of a country, we need to divide the total insurance premiums collected by its population.

Union Budget 2025 Income Tax Live: Economic Survey has a warning for young equity investors, as it anticipates a stock market correction in the US in 2025, which will impact India as well.

India Budget 2025 Income Tax live Updates: As per the Economic Survey, "Elevated valuations and optimistic market sentiments in the US raise the likelihood of a meaningful market correction in 2025. Should such a correction occur, it could have a cascading effect on India, especially given the increased participation of young, relatively new retail investors."
Many of these investors that have entered the market post-pandemic have never witnessed a significant and prolonged market correction. Hence, if one were to occur, its impact on sentiment and spending may be non-trivial, even significant, it further cautions.

Union Budget 2025 Income Tax Live: Will Union Budget 2025-26 bring HRA (House Rent Allowance) under the new tax regime as well?

India Budget 2025 Income Tax Live Updates: Taxpayers under the old tax regime can opt for claiming HRA, or House Rent Allowance exemptions, if they are living in rented accommodation. This is one of the most popular exemptions claimed under the old regime. Currently, the HRA exemption is determined by the lesser of the actual HRA received, 50% of the basic salary for residents in metro areas (40% for non-metro), or the actual rent paid minus 10% of the salary

"We expect some adjustments to the House Rent Allowance (HRA) provisions for salaried employees, which would provide greater financial flexibility as living costs continue to rise. Given the increasing rental prices in urban areas, adjusting these parameters could ease the financial strain on employees and make housing more accessible," says Karan Virwani from Embassy Group.

Union Budget 2025 Income Tax Live: Economic Survey recognises the rising importance of Systematic Investment Plans (SIPS) undertaken by retail investors in the Indian economy

India Budget 2025 Income Tax live Updates: According to the Economic Survey 2024-25, "The mutual fund segment presently has more than 10 crore Systematic Investment Plan (SIP) accounts, with cumulative SIP inflows of Rs 10.9 lakh crore since inception. Monthly average gross SIP flows have more than doubled in the last three years, from Rs 0.10 lakh crore in FY22 to Rs 0.23 lakh crore in FY25. Aided by these sustained inflows, mutual fund ownership in Indian listed companies has risen to a fresh all-time high of 9.5% in the quarter ending September 2024, from 8.7% in FY24."

Union Budget 2025 Income Tax Live: Will senior citizens get some financial respite in this Union Budget 2025-26?

India Budget 2025 Income Tax live Updates: Senior citizens are increasingly looking forward to the Union Budget 2025-26 in the hope that it will provide significant tax reliefs and deductions to them with regards to income from FD, savings accounts, medical expenditures, and more.

Says Nikhil Behl, CEO - Stocks, INDmoney, "Many Indians struggle to save enough for retirement, making financial security a major concern. There is a gap between how much they have saved and how much they need postretirement. With Budget 2025 approaching, senior citizens are hopeful for tax relief that can ease their financial stress. To improve social security and encourage long-term financial planning, increasing the basic tax exemption limit under the new tax system to Rs 10 lakh would provide much-needed financial relief to senior citizens.”

Union Budget 2025 Income Tax Live: Markets are not very hopeful from Budget 2025-26, says Motilal Oswal. Will Modiji's "May God Lakshmi bless poor & middle class remark" change that?"

India Budget 2025 Income Tax live Updates: As per a report by Motilal Oswal titled "India Strategy: FY26 Union Budget: A precursor to long-term policy intent?" the FY26 budget holds significant importance as it is the first full-year budget of the new NDA term. However, market participants have adopted a neutral tone, particularly concerning government capital expenditure (capex).

"Given the current weak consumption trends, the market expects measures to improve household income growth, particularly in urban areas. The government may focus on adjusting income tax slabs to achieve this. It is also possible that indirect taxes on non-essential items could be increased to fund relief on middle-class consumption goods. There may also be some relief on long-term capital gains (LTCG) and short-term capital gains (STCG) taxes from equity markets," it adds.

After Modiji's "May Goddess Lakshmi bless the poor and middle-class" remark, both Sensex and Nifty shot up and were trading in greens as of 1 pm today.

India Budget 2025 Income Tax live Updates: Under Section 194T in Budget 2024, TDS on remuneration paid to partners is stipulated to be paid at 10%. Critics argue for a reduction in the proposed TDS rate from the present 10% to 1% to mitigate its impact on working capital for partnership firms and LLPs.

"Furthermore, there is growing support for lowering the tax rate for partnership firms from 30% to 22%, in line with broader corporate tax reductions. These adjustments would significantly improve liquidity, ease compliance, and encourage business growth, particularly for smaller firms. With these concerns in mind, Budget 2025 may offer much-needed reforms to foster a more conducive environment for entrepreneurship and small business operations," adds CA Jigar Suba.

What are some income tax reliefs that professionals and small business owners want from FM Sitharaman in Budget 2025-26? Read more about it here: These income tax reliefs in Budget 2025 may greatly benefit professionals and small business owners.

Union Budget 2025 Income Tax Live: Over 70 lakh SVAMITVA cards issued by the government in last 6 months, says President Murmu

India Budget 2025 Income Tax Live Updates: The SVAMITVA scheme intends to establish clear ownership of property, particularly for those living in rural areas. As per President Murmu, till date, around 2 crore 25 lakh SVAMITVA cards (land ownership) have been issued by the government. Out of these, 70 lakh cards have been issued in just the last 6 months. "The government is committed to handing over the ownership of residential land to the eligible rural poor by issuing legal ownership cards," she added.

Union Budget 2025 Income Tax Live: PM Awas Yojana gets a Rs 5,36,000 crore shot in the arm ahead of Budget 2025-26

India Budget 2025 Income Tax Live Updates: President Murmu mentioned that an additional Rs 5,36,000 crore will be allocated by the government for the houses promised to additional 3 crore families under the PM Awas Yojana. "The government is committed to the welfare of rural and urban poor," added Murmu. Under this scheme, families not owning a pucca house in any part of the country are eligible to apply.

Union Budget 2025 Income Tax Live: Will Pradhan Mantri Awas Yojana get a much-needed impetus in this Budget 2025-26?

India Budget 2025 Income Tax live Updates: A day before FM Nirmala Sitharaman is set to present Union Budget 2025-26, President Murmu announced that the scope of Pradhan Mantri Awas Yojana, the government's flagship housing scheme, will be expanded to provide new homes to 3 crore additional families. The scheme intends to make affordable housing available for Indians belonging to EWS (economically weaker sections), i.e., those with an annual income of up to Rs 3 lakh and other categories whose annual income does not exceed other specific thresholds. Read more about PMAY in this story: PM Awas Yojana's scope will be expanded to 3 crore more families, says PM Murmu ahead of Budget 2025-26

Union Budget 2025 Income Tax Live: Big relief incoming for poor and middle-class in Budget 2025-26?

India Budget 2025 Income Tax Live Updates: In his address ahead of the Budget session, the Prime Minister invoked goddess Lakshmi, asking for her divine blessings to grace the poor and the middle-class section. This has left many wondering if the upcoming Bugdet will bring about some significant income-tax-related breaks for the middle class and taxpayers. There are hopes of making annual income of up to Rs 10 lakh tax-free under the new tax regime. Taxpayers are also asking for various exemptions to be introduced under the new tax regime, which pertain to home loan, life and health insurance premiums, NPS and more.

Union Budget 2025 Income Tax Live: Scope of Pradhan Mantri Awas Yojana to be expanded in this Budget 2025-26?

India Budget 2025 Income Tax live Updates: In her address to the parliament while kickstarting the Budget session 2025-26, President Murmu stated that the government has decided to expand the Pradhan Mantri Awas Yojana to provide new homes to 3 crore additional families. Notably, PMAY is a credit-linked subsidy scheme (CLSS), which allows economically weaker sections (EWS) and other individuals earning up to a specific income threshold to avail interest subsidies on loans availed to buy residential property or land or to construct homes.

Union Budget 2025 Income Tax Live: "May Goddess Lakshmi bless poor and the middle-class", says PM Modi while addressing media ahead of Budget session

India Budget 2025 Income Tax live Updates: "May goddess Lakshmi bless the poor and middle class," says PM Modi before the inauguration of the Budget session. Does this indicate a big relief for the Indian middle class coming? The Indian middle-class taxpayers have been eagerly looking forward to income-tax-related reliefs for many years, only to be disappointed with meager benefits. This statement by PM Modi is indicative that the upcoming budget 2025-26 may have some significant tax reliefs for the middle class.

Union Budget 2025 Income Tax Live: President Murmu announced health insurance coverage under Ayushman Bharat scheme to those aged 70+

India Budget 2025 Income Tax live Updates: Indian President Draupadi Murmu, in her budget address, announced that "under the Ayushman Bharat Scheme, it has been decided to provide health insurance to six crore senior citizens aged 70 years and above."

Union Budget 2025 Income Tax Live: FM Nirmala Sitharaman to present the Economic Survey in the Loksabha today

India Budget 2025 Income Tax live Updates: Generally presented before the budget, the Economic Survey is a major pre-budget document that shows a comprehensive picture of India's current economic health and of its future. The Hindi and English versions of the Economic Survey will be tabled in the Lok Sabha at around 12 pm, while presenting the same in the Rajya Sabha at around 2 pm.

Union Budget 2025 Income Tax Live: Will Union Budget 2025 increase income tax deductions available for premiums paid for life insurance policies?

India Budget 2025 Income Tax live Updates: Section 80C of the Income Tax Act provides a combined investment limit of up to Rs 1,50,000 for deduction purposes. Taxpayers can claim deductions for various purposes, such as investments in ELSS, PPF, premiums paid towards life insurance policies, and more.

Prashant Tripathy, Managing Director and CEO, Axis Max Life, says that as we approach the Union Budget 2025, we anticipate forward-thinking policy measures that will fortify India's financial landscape and accelerate progress toward Viksit Bharat by 2047.

Union Budget 2025 Income Tax Live: Will FM Nirmala Sitharaman increase the threshold presently allowed under the Income Tax Act for children's education?

India Budget 2025 Income Tax live Updates: At present, the tax benefits offered for children's education under the Income Tax Act are as follows:

● Children's Education Allowance: Rs 100 per month per child up to a maximum of 2 children.
● Hostel Expenditure Allowance: Rs 300 per month per child up to a maximum of 2 children.

Says Sapna Malya, Professor, Finance and Economics, S.P. Jain Institute of Management and Research (SPJIMR), "These allowances can either be removed as the
benefits are too meager to be allowed as a deduction from the parent receiving as an allowance or increased appropriately to pass on the benefit to the parent
educating their children."

Union Budget 2025 Income Tax Live: Will FM Nirmala Sitharaman make taxpayers happy in this Union Budget 2025-26?

India Budget 2025 Income Tax Live Updates: Experts and taxpayers alike are looking forward to FM Nirmala Sitharaman to enhance disposable income through the upcoming budget. Some of the key expectations include:

  1. Hike in standard deduction limit under old and new tax regimes
  2. Hike in basic exemption limit under the new regime
  3. Additional deduction of Rs 50,000 for investing in NPS under the new tax regime
  4. Hike in the deduction for repaying home loans
  5. Easing administrative and compliance procedures

Union Budget 2025 Income Tax Live: Will Union Budget 2025-26 increase the threshold of the tax-free corpus withdrawal limit from 60%?

India Budget 2025 Income Tax live Updates: At present, up to 60% of the total corpus withdrawn from NPS in lump sum is entirely exempt from tax. This means that if you have a corpus of Rs 10,00,000, a lump-sum withdrawal of up to Rs 6 lakh is entirely tax-free.

Says Pankaj Nawani, CEO, of CarePal Secure, "The National Pension System (NPS) should evolve with retirees’ needs. Raising Section 80CCD(1B) deductions to ₹1 lakh would make long-term savings more attractive. Employers, too, could contribute up to 15% of salary (tax-free) to NPS accounts, while allowing penalty-free withdrawals for medical emergencies would add much-needed flexibility."

Union Budget 2025 Income Tax Live: Can taxpayers expect any changes in how dividends are taxed from the Union Budget 2025-26?

India Budget 2025 Income Tax Live Updates: At present, investors have to pay tax on the dividends they receive, which hits those in higher tax brackets even harder.If an individual dividend income exceeds Rs. 5,000, the applicable TDS is 10%. However, if the beneficiary does not submit a PAN, the TDS rate doubles to to 20%

Says Mahek Tomer, Founder & CEO, India's Future Investors, "The Union Budget 2025 is a big moment for the Indian stock market, and investors have high hopes for some much-needed changes. One of the key expectations is a better tax structure for dividends. It would be a huge relief if the government lowers this tax or introduces a separate, lower rate. Simplifying capital gains tax and offering incentives for small investors could also encourage more people to participate in the market. On top of that, promoting financial education and investor-friendly policies would help create a stronger investment environment. With the right steps, this budget can bring stability and growth to the market."

Union Budget 2025 Income Tax Live: Where to watch FM Nirmala Sitharaman present the Union Budget 2025-26?

India Budget 2025 Income Tax live Updates: At around 1 pm today, FM Nirmala Sitharaman will table the Economic Survey in the Loksabha. The Economic Survey presents a macro-economic view and a comprehensive picture of India's overall fiscal health. She will present her eighth consecutive Union Budget tomorrow, i.e., on Saturday, February 1, 2025, at around 11 am in the parliament. You can watch the live proceedings of the budget on the government’s official union budget website, indiabudget.gov.in. You can also catch FM Nirmala Sitharaman delivering her budget speech on the YouTube and TV channels of Sansav TV. The YouTube channel of PIB (Press Information Bureau) will also broadcast the live speech, which will begin around 11 am.

Union Budget 2025 Income Tax Live: Will FM Sitharaman rationalize property taxes levied on real estate purchases in Union Budget 2025-26?

India Budget 2025 Income Tax Live Updates: For first-time homebuyers, the dream of homeownership still remains a financial hurdle. The government might offer much-needed help by expanding the tax breaks available under Sections 80C and 24(b) of the Income Tax Act. Raising the maximum on deductions for home loan principle and interest payments will also greatly reduce the financial strain on middle-class families. Furthermore, providing targeted subsidies or incentives to homebuyers in urban and semi-urban areas could promote greater housing accessibility.

Says Upendra Narayan, Founder, L&Y Homes India Pvt Ltd, "On the property tax front, streamlining and standardizing tax arrangements between states is critical. The current method frequently entails difficult computations, a lack of consistency, and inefficiencies that discourage compliance. Creating a centralised system with clear criteria could encourage more households to pay their taxes while also providing steady money for urban development. "

Union Budget 2025 Income Tax Live: Will Union Budget 2025-26 bring down the high tax rates presently applicable on virtual digital assets (VDAs) such as cryptocurrencies?

India Budget 2025 Income Tax live Updates: As per existing regulations, crypto gains—whether from trading or staking—are taxed at a steep 30%. Also, there is an additional 1% TDS on every trade. This has discouraged traders and investors to distance themselves from cryptos over the recent years.

Says Nikhil Sethi, Founder & MD, Zuvomo, "Despite ranking #1 in crypto adoption and being the 3rd largest creator of unicorns, India has alienated blockchain entrepreneurs with an uncertain VDA policy and a regressive RBI stance that instills fear rather than fostering innovation. India has taken a hostile stance on VDAs—missing the bigger picture. I urge the government to take a forward-looking approach that serves two key purposes: fostering business growth through a clear and progressive policy while ensuring fair taxation by aligning VDAs with other asset classes. Crypto trading should be regulated under SEBI to encourage responsible investment and protect retail investors.India must move beyond being a service provider—we need to build the next OpenAI or DeepSeek, not just facilitate them."

Union Budget 2025 Income Tax Live: Can taxpayers expect a hike in the rebates offered under Section 87A of the Income Tax Act under both old and new tax regimes?

India Budget 2025 Income Tax live Updates: Taxpayers earning up to Rs 5,000,000 per year are eligible for a tax rebate under the old regime, while those earning up to Rs 7,00,000 are eligible for a tax rebate under the new regime. A rebate implies that their taxable liability will be reduced to 0 if their annual income falls within these thresholds.

Says CA Vijaykumar Puri, Partner, VPRP & Co. LLP, "Last year, the Income Tax Department suo moto amended the Income Tax Return utility on 5th July 2024 to deny the benefit of rebate under Section 87A on short-term capital gains earned by taxpayers. Since the Income Tax Return utility cannot be amended without a corresponding change in the Income-tax Rules, 1962, this move was promptly challenged before the High Courts."

"In December 2024, the Delhi High Court ruled in favor of the taxpayers, directing the Income Tax Department to modify the return utility and allow the rebate under Section 87A on short-term capital gains for the financial year 2023-24. Given that the ruling was not in favor of the tax administration's contention, it is possible that the government may introduce legislative amendments in this budget to explicitly clarify the inapplicability of Section 87A rebate on short-term capital gains," he adds.

Union Budget 2025 Income Tax Live: Will Union Budget 2025-26 make it easier for taxpayers to buy their own residential property?

India Budget 2025 Income Tax live Updates: At present, taxpayers under the old tax regime can only claim a deduction of up to Rs 2 lakh on the interest potion of their home loan. Deductions related to home loans are available under the new tax regime as well, but only for let-out or rented properties. No provisions exist for residnetial properties in this regime.

Abhishikta Munjal, Chief Risk Officer, IIFL Home Finance, notes that the upcoming Union Budget 2025-26 presents a crucial opportunity to fuel the growth of the affordable housing sector through a tweak in key policies. "To address this, we recommend increasing the housing loan interest deduction under Section 24(b) from Rs 2 lakh to Rs 4 lakh, alongside raising the Section 80EEA limit from Rs 1.5 lakh to Rs 2 lakh for properties valued up to Rs 60 lakh. The reintroduction of the Credit Linked Subsidy Scheme would provide vital support to first-time homebuyers, as well as those in the EWS and LIG categories, enabling them to access homeownership more easily."

Union Budget 2025 Income Tax Live: Will Union FM Nirmala Sitharaman reinstate long-term indexation benefits on debt mutual funds?

India Budget 2025 Income Tax live Updates: Budget 2024 did away with the indexation benefit previously available while calculating LTCG, or long-term capital gains tax. By adjusting an investment's cost of acquisition for inflation, taxpayers could have reduced their overall LTCG liability.

According to Soumya Sarkar, Co-Founder, Wealth Redefine, an AMFI-registered MFD, "As we approach the Union Budget 2025, it's imperative for the government to address the taxation policies affecting personal finance and mutual fund investments. The Association of Mutual Funds in India (AMFI) has proposed reinstating long-term indexation benefits for debt mutual funds, a move that would encourage retail participation in bond markets and enhance investor confidence. Additionally, introducing pension-oriented mutual fund schemes with tax benefits similar to the National Pension Scheme (NPS) could provide individuals, especially in the unorganized sector, with more avenues for retirement planning. "

Union Budget 2025 Income Tax Live: What are the middle-class taxpayers expecting from FM Sitharaman ahead of Union Budget 2025-26?

India Budget 2025 Income Tax live Updates: As we inch closer to the Union Budget 2025-26 presentation, salaried taxpayers are hoping for tax breaks that will leave more in-hand disposable income in their hands so as to meet rising inflationary pressures and also accelerate slowing urban demand. India’s middle class, the backbone of its consumer economy, has persistently called for meaningful tax relief. This segment has been squeezed by inflation and rising costs, and the budget presents an opportunity to address their grievances.

According to Sandeep Bhalla, Partner, Dhruva Advisors, the following measures could bring about tax relief for them:

Union Budget 2025 Income Tax Live: Will FM Nirmala Sitharaman introduce income tax deductions available for home loan owners under the new tax regime?

India Budget 2025 Income Tax live Updates: The old tax regime allows home owners to claim deductions on the interest part of the home loan for residential property and also for the principal amount under Section 80C of the Income Tax Act. However, under the new tax regime, deductions are only allowed for let-out properties.

Says Prabhakar K S, Founder & CEO, Shree Tax Chambers, "I am not expecting any changes under the old regime. However, to push more and more taxpayers to the new regime, the Finance Minister may allow home loan deductions even under the new regime, subject to an upper limit, but distinguish it from the tax exemption currently under the old regime."

Union Budget 2025 Income Tax Live: Will Union Budget 2025-26 hike preventive deductions available under Section 80C to account for lifestyle diseases?

India Budget 2025 Income Tax live Updates: At present, Section 80D allows a deduction of up to Rs 5,000 per annum to undertake preventive health and medical check-ups. However, given the rising burden of lifestyle diseases, experts are hoping that FM Sitharaman will hike this threshold.

Says Shilpa Arora, Co-Founder & COO, Insurance Samadhan, "Under Section 80D of the Income Tax Act, policyholders can claim an annual deduction of up to Rs 25,000 for health insurance premiums for their family members, while the limit for senior citizens is at Rs 50,000. Besides this, an additional Rs 5,000 is available for preventive health checkups. However, if we factor in the prevalence of lifestyle disorders such as hypertension and diabetes and the increasing risk of cancer, the sum assured that a family of four will have will be insufficient. In addition, the rising medical inflation, which currently stands at 14%, is making it increasingly difficult to cater to health needs with each passing year. In my opinion, the government should increase the limit by Rs 50,000 for the family and Rs 1,00,000 for the senior citizens so that the consumer is encouraged to buy a higher sum assured to cover medical inflation in the future."

Union Budget 2025 Income Tax Live: Will FM Nirmala Sitharaman revise the definition of Economically Weaker Sections for the purpose of affordable housing in Union Budget 2025-26?

India Budget 2025 Income Tax Live Updates: At present, the definition of EWS, or Economically Weaker Sections, is households that have an annual income of up to Rs 3,00,000. Affordable housing has been defined as a house having carpet area up to 60 sqm in metros and 90 sqm in non-metros with a value of up to 45 lakh.

Says Rishi Anand, MD & CEO, Aadhar Housing Finance Ltd., "With property prices having risen in recent years, the current GST concession limit for affordable housing, which is set at Rs 45 lakh, should be revised to Rs 60-65 lakh. Similarly, the RBI's priority sector definition for housing loans should be updated to reflect this new limit. Given the inflation over the past decade, the definitions for EWS (Economically Weaker Sections) and LIG (Lower Income Groups) also need to be updated. An upward revision from Rs 3 lakh to Rs 5 lakh for EWS will broaden the target groups that fall within these classifications."

Union Budget 2025 Income Tax Live: What will Union Budget 2025-26 have in store for first-time home owners?

India Budget 2025 Income Tax live Updates: Currently, the new tax regime does not offer any home loan-related exemptions. Experts and taxpayers alike are demanding more exemptions and deductions to be introduced within the new tax regime, particularly those that will benefit first-time home owners and those looking to buy their own house.

Says Sahil verma , COO of Shray Projects, "As we approach the interim budget, the real estate sector anticipates transformative measures to boost homeownership and market stability. For first-time homebuyers, we expect enhanced tax benefits beyond the existing 80C and 24(b) provisions. An increase in the home loan interest deduction limit from the current Rs 2 lakhs and special incentives for affordable housing segment buyers could significantly improve home affordability for young professionals."

Union Budget 2025 Income Tax Live: Will FM Nirmala Sitharaman completely remove the old tax regime in Union Budget 2025-26?

India Budget 2025 Income Tax live Updates: Over the last 5 years, the government has introduced various measures to make the new tax regime, which offers negligible deductions and exemptions, more attractive for the taxpayers. The old tax regime, which offers around 70 exemptions and deductions for taxpayers to choose from, has not seen any major changes since Budget 2020.

According to Mayank Choudhary, Partner, MARV & Associates LLP, "A new regime for income tax was introduced to slightly phase out the old regime, thus removing the exemptions from the new regime. Also, it is clear that the government wants to remove the exemptions, as the new regime does not have exemptions under Chapter VI-A of the Income Tax Act, 1961. In this budget, it is expected that the government would remove the old regime completely."

Union Budget 2025 Income Tax Live: Will Budget 2025-26 bring about income tax measures for home owners looking to buy a house in cities like Mumbai?

India Budget 2025 Income Tax Live Updates: At present, there is no deduction available for home loan interest or principal amount repayment under the new tax regime. Under this regime, taxpayers can only claim a deduction on their property if it has been partially or wholly rented out.

Says CA Jigar Suba, "To support the government's “Housing for All” initiative, tax reforms are essential to ease the financial burden on first-time homebuyers. Under the new tax regime, there is currently no deduction for interest on home loans for self-occupied properties, making homeownership challenging, especially in cities like Mumbai, where average home prices exceed Rs 1 crore. Allowing home loan interest deductions and increasing limits can make housing more affordable and stimulate economic growth."

Union Budget 2025 Income Tax Live: Will FM Nirmala Sitharaman increase the existing threshold for standard deductions under old and new tax regimes in Union Budget 2025-26?

India Budget 2025 Income Tax Live Updates: At present, taxpayers can claim a standard deduction of up to Rs 50,000 under the old tax regime and up to Rs 75,000 under the new tax regime. The standard deduction threshold under the new tax regime was revised from Rs 50,000 to Rs 75,000 in 2024.

As per Kuljeet Singh, Director Finance at Gi Group Holding India, "With the budget 2025 announcements just around the corner, it’s the perfect moment to reassess our personal finances. Potential revisions in the tax slabs, modifications in the old and new tax regime, and a hike in standard deductions could directly impact our take-home income and savings strategy. If the standard deduction limit is increased, individuals could benefit from lower taxable income, improving disposable income and investment potential."

Union Budget 2025 Income Tax Live: Will FM Nirmala Sitharaman hike the existing limits available under Section 80D for health insurance premiums under Union Budget 2025-26?

India Budget 2025 Income Tax Live Updates:Section 80D allows taxpayers to claim deductions towards preventive medical checkups and health insurance premiums paid for self, spouse, and dependent parents. The threshold for preventive medical checkup deduction is currently set at Rs 5,000 per annum.
According to Prabhakar K. S., Founder & CEO, Shree Tax Chambers, "Section 80D is expected to see upward changes as follows: