Union Budget 2025 Expectations Live Updates: What are different sectors anticipating ?

The Union Budget for 2025 in India is expected to address several key factors impacting income tax, with a focus on economic recovery, boosting investment, and providing relief to taxpayers. While specific details can only be confirmed once the budget is announced, here are some expected trends and areas that could be covered in terms of income tax policy:

1. Reduction in Tax Rates

• Personal Income Tax: There may be further reduction in personal income tax rates, especially under the new tax regime, which was introduced in the previous budgets. This could include the rationalization of tax slabs, offering more tax relief for the middle-income groups.
• Corporate Tax: Corporate tax rates could be tweaked further to incentivize business growth and improve India's competitiveness as an investment destination.

2. Increase in Tax Exemption Limits

• Section 80C (Investment Exemptions): There could be an increase in the deduction limit under Section 80C, which currently stands at ₹1.5 lakh. This would provide relief for individuals investing in long-term financial instruments like PPF, ELSS, etc.
• Revised Tax Slabs: There could be new, more progressive tax slabs or a rationalization of existing ones, providing more disposable income to the taxpayer.

3. Focus on Digital and Green Economy

• Incentives for Green Investments: There might be a greater push to encourage investments in green energy and eco-friendly technologies, which could be accompanied by enhanced tax deductions or credits for individuals and businesses investing in renewable energy, electric vehicles, etc.
• Tax Incentives for Digital Economy: With the growing focus on digital transformation, there may be tax incentives for businesses and individuals adopting digital solutions or investing in digital infrastructure.

4. Revisions to the New Tax Regime

• The government might simplify and enhance the attractiveness of the new tax regime, which offers lower tax rates but no exemptions. As the government looks to promote ease of compliance, there could be further modifications to the new tax regime to encourage more taxpayers to shift from the old to the new regime.

5. Measures to Curb Tax Evasion

• Strengthening measures against tax evasion, including more stringent reporting requirements, anti-money laundering provisions, and enhanced use of technology in tax assessment, could be a priority.

6. Tax Relief for Salaried Individuals and Senior Citizens

• There could be tax relief measures for salaried individuals, including deductions for those who work remotely, medical expenses, etc. Senior citizens may also benefit from higher exemptions or lower tax rates.

7. Rural and Agricultural Incentives

• Given the importance of agriculture in India, there could be income tax incentives for farmers and agricultural enterprises. This might include exemptions or deductions for agricultural income and investments in rural infrastructure.

Overall, the budget will likely aim to strike a balance between boosting economic growth and providing adequate tax relief to various segments of the population while ensuring that the government has sufficient revenue to meet its fiscal targets.