Mon Dec 30 09:50:00 UTC 2024: ## Income Tax Relief Expected in India’s Union Budget 2025
**New Delhi, [Date]** – As India anticipates the presentation of the Union Budget 2025 on February 1st, salaried individuals are eagerly awaiting potential income tax relief. Rising inflation and the increasing cost of living have fueled hopes for government measures to alleviate the financial burden on taxpayers.
Economists and experts, including those who met with Prime Minister Narendra Modi in a pre-budget meeting, have urged the government to reduce income tax rates to stimulate economic growth and boost savings. Lowering tax rates, they argue, would increase disposable income, encouraging spending and potentially reviving sluggish consumption sectors.
While the 2024 Budget introduced changes to the new tax regime—widening two income tax slabs and increasing the standard deduction from ₹50,000 to ₹75,000—significant income tax relief hasn’t been seen since the 2020-21 financial year, which introduced a new, optional regime with lower rates. This optional regime, however, requires forgoing certain deductions and exemptions.
Tax experts Ajinkya Gunjan Mishra and Dipesh Jain noted that while recent changes have positively impacted disposable income and consumer spending, further adjustments are needed. Jain highlighted the reduction of the long-term capital gains tax rate to 12.5% in 2024, though he cautioned that the removal of the indexation clause might increase the tax burden in some cases.
Both experts agreed that India’s income tax structure is moderate compared to global standards, with a top marginal tax rate of 39% under the new regime. They suggested that rationalizing effective tax rates alongside other measures could further boost purchasing power and stimulate the economy. The upcoming budget will be closely scrutinized to see if these calls for tax relief are heeded.
First Piper 