Budget 2025: Tax Relief for Salaried Up to Rs 15 Lakh

Aakhir Tak – In Shorts

1. Budget 2025-26 is expected to announce tax relief for incomes up to Rs 15 lakh.
2. The basic exemption limit may rise from Rs 3 lakh to Rs 4 lakh.
3. Proposed changes aim to boost spending power amid inflation in urban areas.
4. Personal income tax collections grew by 25% this fiscal year.
5. The changes could stimulate consumption and economic growth.

Aakhir Tak – In Depth

Significant Tax Relief Expected

Budget 2025-26 is likely to introduce tax reforms benefitting individuals earning up to Rs 15 lakh annually. The proposed changes focus on increasing disposable income to spur economic activity.

Revisions in Tax Slabs

Currently, under the new tax regime, the exemption limit is Rs 3 lakh. Proposed revisions include increasing this threshold to Rs 4 lakh. Additionally, the 5% tax slab might cover income between Rs 4 lakh and Rs 7 lakh, providing substantial relief to the salaried class.

Addressing Urban Inflation

Urban taxpayers, particularly those earning between Rs 13-14 lakh, are the primary beneficiaries. These measures aim to alleviate the impact of inflation, which has eroded purchasing power significantly.

Expert Insights

According to Sudhir Kapadia, EY India Tax & Regulatory Services partner, “Expanding tax slabs by Rs 1 lakh at each level could reduce tax burdens. Such changes are essential for boosting urban consumption and overall economic growth.”

Growing Tax Revenues Enable Reforms

During April-November FY25, personal income tax collections increased by 25%, reaching Rs 7.41 lakh crore. With revenues exceeding expectations, the government is in a strong fiscal position to implement relief measures. These changes could strike a balance between taxpayer relief and sustained economic momentum.

Aakhir Tak – Key Takeaways to Remember

1. Tax exemption limits may increase to Rs 4 lakh, benefitting earners up to Rs 15 lakh.
2. The proposed tax reforms target urban taxpayers to boost consumption.
3. Rising inflation has made these changes imperative for economic growth.
4. Personal income tax collections create fiscal space for these reforms.

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