Budget 2025: Anticipated Changes In Income Tax Slabs, Increased Standard Deduction, And Section 80C Limit – Key Expectations

As Finance Minister Nirmala Sitharaman prepares to present the Union Budget 2025-26 on February 1, expectations are high for significant reforms, especially in income tax. The government is reportedly considering five key changes that could benefit salaried individuals.

1. Standard Deduction Increase

One of the most anticipated changes is an increase in the standard deduction. Currently, salaried employees and pensioners enjoy a standard deduction of ₹50,000 under the old tax regime and ₹75,000 under the new one. Experts believe this could rise to a maximum of ₹1 lakh, offering better support to taxpayers amidst rising inflation.

2. Revised Income Tax Slabs

There’s growing speculation that the government may adjust income tax slabs under the new tax regime to attract more taxpayers. A potential change could see the 30% tax rate applied to incomes above ₹20 lakh. This change aims to make the tax system more equitable and in line with today’s economic climate.

3. Senior Citizens’ Tax Relief

There’s also talk of offering greater tax relief for senior citizens. The government may raise the exemption limit or reduce tax rates for individuals aged 60 and above, reflecting the need to provide financial relief to the elderly in today’s challenging economic environment.

4. Increase in Section 80C Deduction

Currently, the Section 80C deduction limit stands at ₹1.5 lakh. Experts suggest raising this cap to ₹3.5 lakh to help taxpayers manage rising living costs and encourage more investments in schemes like PPF and ELSS.

5. Gold Import Duty Hike

Concerns about India’s growing trade deficit might lead to a rise in the import duty on gold, currently at 6%. This could help curb gold imports, though it may result in higher domestic prices.

Budget 2025 holds the potential to bring significant changes that could ease the financial burden on salaried individuals. The anticipated tax reforms, from an increased standard deduction to higher limits for Section 80C, aim to provide much-needed relief amid rising costs of living. Additionally, a fairer tax structure, particularly for senior citizens, could foster a more inclusive and equitable system. While the proposed gold import duty hike remains a concern for some, it underscores the government’s focus on balancing fiscal responsibility with economic stability. As the nation waits for the Union Budget announcement on February 1, these proposed changes reflect the government’s efforts to address the pressing needs of taxpayers and navigate the current economic challenges.

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