As the government gears up for the upcoming budget, there is widespread anticipation that taxpayers with annual incomes up to ₹15 lakhs may receive additional reliefs. These measures aim to boost disposable income, stimulate consumption, and support middle-income groups. Below are some potential tax reliefs that could be announced.
- Enhancement of the Basic Exemption Limit
Currently, the basic exemption limit under the old tax regime stands at ₹2.5 lakhs. For senior citizens, it is ₹3 lakhs, and for very senior citizens, ₹5 lakhs. The government might consider increasing these limits:
From ₹2.5 lakhs to ₹3 lakhs for individuals below 60 years.
From ₹3 lakhs to ₹3.5 lakhs for senior citizens.
This change would provide direct tax savings for all eligible taxpayers.
- Increase in Standard Deduction
The standard deduction is currently ₹50,000 for salaried individuals and pensioners. Given rising living costs, the government might increase it to ₹75,000 or ₹1,00,000. This relief would especially benefit individuals with incomes up to ₹15 lakhs by reducing their taxable income.
- Revisions in Tax Slabs Under the New Regime
The new tax regime, which simplifies filing by eliminating exemptions, could see a revision in tax rates and slabs. Potential changes include:
Raising the 10% slab ceiling from ₹6 lakhs to ₹8 lakhs.
Extending the 20% slab threshold from ₹12 lakhs to ₹15 lakhs.
This would make the new regime more attractive for middle-income taxpayers.
- Section 80C Limit Enhancement
Currently, taxpayers can claim deductions up to ₹1.5 lakhs under Section 80C for investments in PPF, ELSS, NSC, and other instruments. The government may consider increasing this limit to ₹2 lakhs, encouraging greater savings and investment while reducing taxable income.
- Higher Rebate Under Section 87A
Taxpayers with incomes up to ₹7 lakhs currently enjoy a full rebate under Section 87A in the new tax regime. There is speculation that this limit could be increased to ₹10 lakhs, extending the zero-tax benefit to a larger population.
- Increased Benefits Under Section 80D
Section 80D allows deductions for health insurance premiums:
Up to ₹25,000 for individuals below 60 years.
Up to ₹50,000 for senior citizens.
Raising these limits could offer greater relief, especially amid rising healthcare costs.
- Introduction of a Middle-Income Group Tax Relief Package
The government may introduce a specific relief package targeting taxpayers with incomes between ₹5 lakhs and ₹15 lakhs. This could include:
Tax credits for investments in green energy (e.g., solar panels, EVs).
Special deductions for expenses like school fees or home rent.
- Housing Loan Interest Deduction
Section 24(b) currently allows deductions of up to ₹2 lakhs on home loan interest payments. Raising this cap to ₹2.5 lakhs or ₹3 lakhs would benefit homeowners, especially those in the ₹15 lakh income bracket.
- Reduced Tax Rates for Professionals and Freelancers
Professionals and freelancers often face higher tax burdens due to the absence of employer-provided benefits. The government might announce reduced tax rates or introduce specific deductions for this group.
- Simplified Compliance for Small Taxpayers
Simplified tax filing processes, such as:
Pre-filled ITR forms with detailed information on income and deductions.
Further expansion of the faceless assessment system to ensure ease of filing.
Conclusion
The upcoming budget is expected to focus on providing significant tax reliefs to individuals with incomes up to ₹15 lakhs. By revising tax slabs, increasing deduction limits, and introducing targeted measures, the government aims to ease the financial burden on middle-income groups while boosting economic activity.
These potential announcements would reflect the government’s commitment to a taxpayer-friendly regime, fostering financial stability and growth for a large segment of the population.
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