The Union Budget 2025, expected on February 1 to be presented by Finance Minister Nirmala Sitharaman, has evinced nationwide anticipation, especially with regard to income tax reforms. Individuals are on their toes, awaiting what the government will actually do about lessening the tax burden on them. A primary focus is the revision of the tax slabs and enhancements of deductions under the Old Tax Regime.
Proposed Changes in Deductions for Savings and Senior Citizens
The area of speculation among these includes increasing the limits on deduction available under Sections 80TTA and 80TTB under the Income Tax Act. It presently allows individuals below 60 years and HUFs to claim a deduction of ₹10,000 on interest earned from savings accounts. Experts believe this limit, which has stayed at ₹10,000 since it was introduced in 2012-13, needs to be increased to ₹20,000 so as to more realistically reflect the economic situation today.
Section 80TTB allows a deduction of up to ₹50,000 on interest incomes from savings accounts, fixed deposits, and recurring deposits, a more comprehensive tax relief for senior citizens. But with rising healthcare costs and increased life expectancy in India, many are calling for this threshold to be raised to ₹1 lakh. This could offer much-needed financial support to senior citizens dependent on these secure investment options for regular income.
New Beginnings for Income Tax Under Union Budget 2025
Bridging Old and New Tax Regimes: The second key recommendation is that deductions under Sections 80TTA and 80TTB are extended to the taxpayers who have opted for the New Tax Regime, which presently is available only in the case of the Old Tax Regime. This is also a discouragement for shifting to the new regime. These benefits, if allowed in the new regime, will encourage more taxpayers to switch over with continued relief for individual and senior citizens.
As Budget 2025 approaches, everyone is waiting to see if these recommendations will be incorporated, a precursor, as it were, to any ease in financial burdens that the Indian populace currently endures.
Also, see: Future of Indian students in Canada hangs by a thread after Trudeau’s resignation