Union Budget 2025 Date and Its Impact on Income Tax Benefits
Experts say the upcoming Union Budget 2025, which will be presented on February 1, probably won’t bring big changes in income tax refunds or increase tax rebates. The Union Finance Minister, Nirmala Sitharaman, has already explained changes in income tax slabs and possible refunds up to
7 lakh with the new income tax system. But this years interim budget likely wont raise tax rebates further.
What to Expect from Union Budget 2025
When the budget is announced, everyone looks out for income tax updates. Salaried individuals especially watch for any rise in tax rebates. But for the interim Union Budget 2025, it’s unlikely the income tax rebate under the new tax system will go up. Finance Minister Sitharaman may adjust tax slabs but big changes are not expected this time.
Interim Budget 2025 Highlights
Tax experts believe many salaried workers want higher basic exemption limits and better House Rent Allowance (HRA) exemptions under both the old and new tax systems.
There were talks that those who choose the New Tax Regime might see their rebate limit increase from 7 lakh to 7.5 lakh, but those changes may not happen in the vote-on-account budget.
Main Features of Union Budget 2025
- Since Lok Sabha elections are coming next year, big announcements are unlikely in the Union Budget 2025 on February 1.
- The full budget with detailed plans will be presented after elections once a new government is formed.
- The interim budget will include financial estimates, government spending, revenue, fiscal deficit, and other updates for the current year.
- Major policy changes are not made in interim budgets.
- In the Union Budget 2024, Finance Minister Sitharaman announced five tax-related changes that help middle-class workers.
- These include tax rebates, changes in tax structure, extending standard deduction benefits to the new tax system, lowering the highest surcharge rate, and increasing exemption on leave encashment for retired salaried employees outside government service.
Important Announcements in Last Years Budget
- Income tax rebate threshold under the new tax regime was raised from 5 lakh to 7 lakh.
- Basic exemption limit went up from 2.5 lakh to 3 lakh.
- A new family pension deduction of 15,000 was introduced.
- Standard deduction benefit was extended to salaried individuals, pensioners, and family pensioners under the new tax regime.
- Earlier, the standard deduction of 5,000 applied only in the old tax system.
Note: The New Tax Regime brought new tax slabs and concessional rates to simplify taxes. It applies to individuals, associations of persons, and Hindu Undivided Families.
Income Tax Slabs Under New Tax Regime (Post 2024 Budget)
- Income up to 3 lakh: No tax
- 3 lakh to 6 lakh: 5% tax
- 6 lakh to 9 lakh: 10% tax
- 9 lakh to 12 lakh: 15% tax
- 12 lakh to 15 lakh: 20% tax
- Above 15 lakh: 30% tax
Keep in mind, if you choose the new tax system, you cant claim many exemptions and deductions like HRA, Leave Travel Allowance, 80C, 80D and others that are available in the old tax system.
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