Tue Jan 28 19:22:36 IST 2025: ## Budget 2025 Anticipation: Taxpayers Hope for Relief Amidst Inflation

**NEW DELHI, India –** As Finance Minister Nirmala Sitharaman prepares to present the Union Budget 2025 on February 1st, taxpayers are anxiously awaiting potential tax breaks. With rising inflation and reduced disposable incomes, the focus is squarely on the New Tax Regime and calls for significant revisions.

Experts are urging the government to increase the standard deduction to at least ₹1.2 lakh annually, aligning it with the estimated monthly expenses on transport and medical care. Currently, the standard deduction under the New Tax Regime stands at ₹75,000, while the Old Tax Regime offers ₹50,000. Santhosh Sivaraj, Partner at BDO India, advocates for parity between the two regimes. He points out that ₹1.2 lakh reflects the realistic annual expenditure on these essential items.

Further demands include enhancements to Section 80C tax deductions (currently capped at ₹1.5 lakh) and the inclusion of House Rent Allowance (HRA) exemptions within the New Tax Regime. Currently, HRA exemptions are only available under the older tax system.

The introduction of the New Tax Regime in 2020 aimed to simplify the tax structure by offering lower tax rates in exchange for removing several deductions, including HRA and the standard deduction. While the standard deduction was reinstated in 2018 at ₹40,000 and subsequently increased, taxpayers are hoping for further relief in the upcoming budget. The inclusion of HRA and significant increases to 80C deductions are key to making the New Tax Regime more attractive and beneficial for a wider range of taxpayers. The Budget 2025 is expected to address these concerns and provide much-needed financial relief to Indian citizens.

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