Pre-Budget Expectations 2025: Taxes and the Common Man
As the Union Budget 2025 approaches, all eyes are on the government to deliver measures that address the aspirations of the common man while fostering economic growth. Tax reforms and reliefs remain a focal point for millions of taxpayers, with expectations high for policies that can mitigate financial burdens, enhance disposable income, and stimulate consumption in the economy.
Taxation: Hopes for Relief
For salaried individuals, the anticipation is centered on increased income tax slabs or a reduction in tax rates. With inflation impacting household budgets, taxpayers expect a higher basic exemption limit, potentially raised from ?2.5 lakh to ?5 lakh under the old tax regime. Additionally, those opting for the new tax regime seek enhanced deductions to make it a more attractive alternative.
Standard Deduction Hike: The standard deduction, currently at ?50,000, is another area where relief is expected. A hike in this limit could ease the burden on salaried professionals and pensioners.
Section 80C Revisions: Taxpayers have long sought an increase in the limit under Section 80C, currently capped at ?1.5 lakh. Raising this limit to ?2.5 lakh would accommodate modern financial realities, encouraging savings in instruments like ELSS, PPF, and insurance.
Indirect Tax Adjustments
The middle class is also hoping for rationalization of GST rates on essential goods and services. Lower taxes on items like healthcare services, education tools, and daily necessities could provide immediate relief to households.
Focus on Affordable Housing and Real Estate
Affordable housing remains a critical area, with taxpayers hoping for an enhanced interest deduction on home loans under Section 24(b). The existing cap of ?2 lakh on interest paid for self-occupied property loans could be raised to ?3 lakh to revive demand in the real estate sector.
Support for Small Businesses and Entrepreneurs
The common man also includes micro, small, and medium enterprises (MSMEs), which are the backbone of India’s economy. Simplified tax compliance procedures, reduced GST complexities, and access to credit are essential for ensuring that these businesses thrive.
Health and Education Priorities
In light of recent health challenges, including the ongoing fight against lifestyle diseases, increased deductions for medical insurance premiums under Section 80D are expected. Additionally, better support for education loans through interest rate subsidies would benefit aspiring students and their families.
Inflation and the Common Man
Inflation continues to erode purchasing power, and the budget is expected to include measures to combat rising prices. By focusing on supply-side interventions and reducing taxes on essentials, the government could offer tangible relief.
A Balance Between Growth and Relief
While meeting the expectations of the common man is crucial, the government must balance these measures with its fiscal responsibilities. Experts predict that the Finance Minister will aim to boost consumption without compromising the country's economic growth trajectory or fiscal consolidation targets.
Conclusion
The Union Budget 2025 is not merely an economic document; it is a statement of intent toward the welfare of the common man. Whether through tax reliefs, GST rationalizations, or measures to control inflation, the aam aadmi is hopeful for a budget that brings tangible benefits. As the Finance Minister prepares to unveil the budget, the aspirations of the common man remain at the heart of India’s growth story.
