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This time, inflation has crossed the path provided by the RBI. Whilst the growth of the economy will be slower it is also forecasted to decrease. In such a situation, the central government can provide the benefits of tax relief to the common man in the budget.
Increase in Standard Deduction
The government can change the limit of standard deduction once again. Last time it was increased under the new tax system. This time the limit of standard deduction can be increased under the old tax regime. Currently, salaried employees and pensioners avail a standard deduction of ₹ 50,000 under the old tax regime and ₹ 75,000 under the new system. Experts say that it can be increased to Rs 1 lakh.
There may be a change in the tax slab
The government may consider making further changes in the income tax slabs under the new tax system to encourage more taxpayers to adopt it. In particular, there is speculation that a 30% tax rate may be implemented at income levels above ₹ 20 lakh.
Tax Slabs Under The New Tax Regime
₹0-₹3 lakh: Nil
₹3-₹7 lakh: 5%
₹7-₹10 lakh: 10%
₹10-₹12 lakh: 15%
₹12-₹15 lakh: 20%
₹15 lakh and above: 30%
Increasing the Section 80C Deduction Limit
There is also a discussion that this time the deduction limit under section 80C can also be increased. Currently, the maximum limit of deduction under section 80C is ₹ 1.5 lakh. However, due to inflation and increasing financial pressure on taxpayers, experts are demanding the government increase this limit further. It can be increased to at least Rs 2 lakh annually.
Can Export Duty on the gold Increase?
The government may raise import duty on gold in Budget 2025 due to concerns over India's trade deficit. Currently, India levies a 6% import tax on gold, down from the previous 15%. An increase in this duty could curb excessive gold imports and potentially reduce the country's trade imbalance, but it could also increase domestic gold prices, which may diverge from international market trends.
