What tax changes to expect as NDA comes back in power?

With the new administration only created two days ago, it's an intriguing read to see what the average person expects from Modi government 3.0.

The government has not updated income tax slabs or rates since 2020-21.

According to data, from 2020 to 2024, the share of corporation tax in direct taxes has consistently decreased while the proportion of personal tax has increased. 

Corporate tax accounted for 53% in 2020 but fell to 46.9% by 2024. In contrast, the share of personal tax climbed from 46.5% to 53.3%.

It is expected that this tendency will alter, with the share of personal taxes decreasing this time.

Previously, taxpayers could select between the old and new tax systems, but this time, the government may attempt to establish a balance between the two. 

Citizens with an annual income of Rs 3 lakh were exempt from tax under the new regime, whereas it was Rs 2.5 lakh in the previous regime. 

When the government proposes its budget this year, it is expected that up to Rs 3 lakh will remain tax-free under both tax regimes. 

The new rule should include an exemption for insurance sums above Rs 7 lakh.