Budget 2024 Expectations India: Check Finance Minister Nirmala Sitharaman’s lofty demands on taxpayers.
Union Finance Minister Nirmala Sitharaman displayed a tablet wrapped in a red bag containing budget documents outside the Finance Ministry. (File photo/PTI)
Budget 2025 Income Tax Expectations: As Budget 2025 approaches, taxpayers and the business community alike are anticipating significant reforms aimed at extending fiscal relief and simplifying the tax system. According to Anuj Garg, Director, Taxation, AHSG & Company LLP, the upcoming budget could bring much-needed relief to individual taxpayers and boost the growth of startup companies in India.
Increase in minimum slab rate for taxpayers
One of the key recommendations made by Garg is to increase the minimum slab rate for individual taxpayers under the new tax regime. Currently, individuals with an annual income of up to Rs. 3 lakh do not pay any tax, but Garg believes that the limit should be increased to Rs. 5 lakh They suggest that the move will provide immediate relief to middle-income taxpayers, stimulate consumption and boost economic activity.
Extending exemptions for lower-Income taxpayers
Currently, taxpayers with income up to Rs. 7.5 lakh who opt for the new tax regime enjoy 100% exemption. Garg advocates increasing this exemption limit to Rs. 10 lakh, extending this benefit to a larger segment of the population and increasing disposable income for low and middle income earners.
Revised exemption limit for long term capital gains
Another important recommendation focuses on taxation of long-term capital gains (LTCG) arising from the sale of equity shares, equity-based mutual funds, and similar assets. Garg proposed to increase the exemption limit from Rs. 1 lakh to Rs 2-2.5 lakh. They say the change will encourage equity investment and provide a much-needed boost to the country’s capital markets, which have seen volatile participation in recent years.
Simplification of TDS process for sellers of non-residential property
The tax collection process for non-resident Indians (NRIs) selling property in India is still cumbersome. Home buyers currently have to withhold 1% TDS on property transactions above Rs. 50 lakh However, if the seller is a non-resident, the home buyer must first obtain a Tax Deduction Account Number (TAN) and follow a complex procedure for deducting TDS at the current rate. Garg has suggested simplifying the process to match the ease of transactions with residential sellers, deducting TDS only on the capital gains portion or introducing a lower, more standard rate.
Extension of Sunset Clause for Startups
A staunch supporter of India’s startup ecosystem, Garg also called for the extension of the sunset clause under Section 80-IAC of the Income Tax Act. This section allows eligible start-ups to claim 100% deduction on profits for three consecutive years out of the first ten years of their operation, provided they are incorporated between 1 April 2016 and 31 March 2025.
To further boost the growth of start-ups, Garg urged the government to extend the incorporation period for these businesses, in line with Prime Minister Narendra Modi’s vision to promote innovation and entrepreneurship across the country. Ensure continuous cooperation and coordination with
According to Garg, these proposed changes are aimed not only at providing financial relief to individual taxpayers but also at promoting investment and promoting a more inclusive economic environment in the country. As the government focuses on inclusive growth and innovation, Budget 2025 is expected to lay the foundation for a more efficient and tax-friendly India.
Date of Union Budget 2025
Finance Minister Nirmala Sitharaman is expected to present India’s Union Budget 2025 on Saturday, February 1, 2025.