Union Finance Minister Nirmala Sitharaman will present the Budget on February 1, 2025. This year’s Budget is likely to include income tax concessions and an increase in standard deduction.
There are only two days left for the presentation of the Union Budget. Union Finance Minister Nirmala Sitharaman will present the Budget for the financial year 2025-26 in Parliament on Saturday, February 1, 2025. The common citizen is expecting that there will be concessions in income tax in the budget this year. According to exclusive information obtained by CNBC Awaaz with the help of its special sources, it is hoped that there will be a significant increase in the standard deduction in this year’s budget.
According to the information received, the government will make such changes in the tax-related rules that there will be no need to amend the Income Tax Act to increase the standard deduction. Sources have said that proposals in this regard have been made in the meetings being held for preparing the budget. The
government is planning to make such changes that the standard deduction limit can be increased without making any amendments to the tax-related law and the limit can be easily increased later.
What other changes are possible in the tax law?
Using the word text year instead of assessment year. Using illustrations and tables to simplify tax rules. Also, the government is considering introducing the form of guiding notes instead of explanations and provisions. Many changes can be made in the tax law as mentioned above. Sources say that words with British references like Notwithstanding will be removed.
How is the standard deduction currently available?
Currently, employees can avail the standard deduction in two ways. If an employee chooses the old regime while filing income tax, he gets a standard deduction of up to Rs 50,000. But if he chooses the new regime, he gets a standard deduction of up to Rs 75,000.
When was the standard deduction introduced?
Standard deduction is a tax deduction scheme that was first introduced in 1974. This scheme was introduced by amending Section 16 of the Income Tax Act. Later, the standard deduction scheme was discontinued in 2005. For almost a decade, taxpayers did not get any relief in terms of standard deduction. Then the provision of standard deduction was reintroduced in the 2018 budget. During that time, a deduction of Rs 40,000 was implemented under standard deduction in place of Rs 19,200 transport allowance and Rs 15,000 medical reimbursement.
In the Interim Budget 2019, this limit was increased to Rs 50,000. This standard deduction was included under the new tax regime in 2023. In the Budget 2024, this limit was increased to Rs 75,000 under the new tax regime.
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