Good news for taxpayers! Zero tax on income up to 10 lakhs, know the new exemption Income Tax New Udpate
Income Tax New Update – As soon as February arrives, everyone’s eyes are fixed on the new budget. This budget can be full of expectations especially for the middle class and taxpayers. There are reports of big changes in the income tax rules in this budget, and these changes can prove to be quite relieving. Let us know how the tax rules can change in the budget of 2025 and what effect it will have on you.
Will there be no tax on income up to Rs 10 lakh?
The biggest news is that people with annual income up to Rs 10 lakh can get complete tax relief. Yes, if your income is up to Rs 10 lakh, then you will not need to pay tax.
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What will happen to income up to Rs 20 lakh?
Now let’s talk about those people whose annual income is up to Rs 20 lakh. Such taxpayers are also expected to get some relief in the budget. The government is considering introducing a new tax slab for those with an income of Rs 15 to 20 lakh.
- What could be the new slab?
- There is no tax on income up to Rs 10 lakh.
- 25% tax on income of Rs 15-20 lakh.
This change can be implemented under the new tax system. If this happens, then the middle class people will get direct benefit.
Why should the limit of tax free income be increased?
Due to inflation, the purchasing power of people has reduced. Experts believe that if the tax free income limit is increased to Rs 10 lakh, then people will have more money in their hands. This will not only benefit taxpayers, but demand in the market will also increase. When people make more purchases, it will also impact the country’s economy.
What were the changes in 2023?
If you remember, in the budget of 2023, the exemption limit was increased to Rs 7 lakh under the new tax system. This was a fixed amount, which gave some relief to the middle class. Along with this, the benefit of standard deduction of Rs 75,000 was also available.
But now there is a plan to improve it further in the budget of 2025.
How will the middle class benefit?
- More money will be saved: If there is no tax on income up to Rs 10 lakh, then the middle class will have more money saved.
- Spending capacity will increase: When people have more money, they will spend more. This will increase demand in the market.
- Boost to economic growth: Tax rate cuts will encourage people to invest and make purchases, which will benefit the country’s economy.
What loss will the government suffer?
Of course, if the government gives such a huge rebate in income tax, it may have to suffer a loss of revenue of Rs 50,000 crore to Rs 1 lakh crore. However, experts believe that this move can prove beneficial for the government in the long term, as it will accelerate the pace of the market and increase the spending capacity of the people.
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