Union Budget 2025: Is there GOOD NEWS for salaried employees? Here's what to expect

The 2025 budget is expected to bring several changes to ease the tax burden on salaried individuals. These include a potential increase in the basic exemption limit, enhanced income tax deductions, a higher NPS investment limit, adjustments to home loan interest deduction, and revisions to capital gains tax.

Finance Minister Nirmala Sitharaman will present the Union Budget 2025 on February 1st. Salaried employees and taxpayers across the country are looking forward to announcements that could potentially reduce their financial burdens. What changes can be expected in this budget?

Increased Basic Exemption Limit

The new tax regime allows a basic exemption for those earning less than ₹3 lakh. This limit is expected to be raised to ₹5 lakh, allowing taxpayers more disposable income.

Enhanced Income Tax Deductions

The current new tax regime provides a tax exemption for individuals earning up to ₹7 lakh. Most experts advocate raising this limit to ₹9 lakh for the benefit of the middle class. Experts say that raising this limit to ₹9 lakh will help middle-class taxpayers keep more disposable income in their hands. It is also expected that there may be new slabs at lower tax rates, such as 25% tax on income between ₹15 lakh and ₹18 lakh, to reduce the burden on taxpayers earning above ₹15 lakh.

Tax-Free Limit for NPS Investments

Under NPS, the maximum tax-exempt investment limit is ₹50,000, and experts recommend raising the limit to encourage higher retirement savings. Other recommendations for greater flexibility in withdrawal rules would help improve taxpayers' ability to plan for retirement.

Home Loan Interest Deduction

Section 24(b) of the Income Tax Act recommends a maximum interest deduction limit of ₹2 lakh for home loans. Taxpayers have said that this limit is insufficient and have urged the government to extend it to ₹3 lakh per annum or to provide full deductions for interest payments on home loans for one property. An announcement regarding this is expected in this budget.

Amendments to Capital Gains Tax

Along with the above tax changes, taxpayers recalled their previous demand for changes in long-term capital gains tax. Investors are expecting the LTCG exemption limit to be raised to ₹2 lakh or more to take home this higher income.

Tax Reforms

Small businesses and professionals may see an increase in the limits of presumptive tax on their income under sections 44AD and 44ADA, thus easing business and providing relief.

Budget 2025 Expectations

Talk of tax incentives for investments in healthcare, renewable energy, and skill development is also considered one of the key features of the upcoming budget.

The salaried class expects the government to consider some measures in the Union Budget 2025 to reduce the financial burden and support economic growth. With demands ranging from revising tax slabs to increasing permissible deductions, all eyes are on Finance Minister Nirmala Sitharaman.

The salaried class hopes that the Union Budget for 2025 will contain measures to address their financial woes rather than economic growth. Amid demands ranging from revising tax slabs to increased deductions, all eyes will be on Finance Minister Nirmala Sitharaman on February 1 when she unveils the government's drinking plan. However, it remains to be seen how these expectations of the salaried class will be fulfilled, but this budget will guide their financial planning in one direction or another, which will impact the lives of millions of taxpayers.