Budget 2025: Key Changes Taxpayers can expect in personal tax

29 Jan 2025 , 11:11 AM

With the Union Budget approaching, individual taxpayers in India are looking forward to key changes that will simplify the tax process, promote greater transparency within the taxation system, and offer enhanced relief.

As the simplified tax regime gains favor over the previous tax regime, there is a greater emphasis on improving the tax structure to reduce compliance burdens. Several key reform measures are expected to be prioritized in the forthcoming budget.

1. Among the top expectations is further relief for taxpayers who will opt for the new tax regime. It is highly under anticipation that the government will raise the basic exemption limit from existing ₹3 Lakh to ₹5 Lakh. Additionally, a reduction in the highest tax rate from 30% to 25% is also expected.
2. The experts are also anticipating that the Standard Deduction limit shall be increased from ₹75000 to ₹1,00,000.
3. Furthermore, since the government is putting special focus on promoting Electric Vehicles, it may decide to bring in valuation norms for electric vehicles, topped with higher concessions.
4. The current deadline for filing updated or belated tax returns is December 31, which might make it difficult for globally mobile persons to secure tax claims like foreign tax credits. Therefore, extending the deadline from December 31 to March 31 is much expected as it can provide great relief to the taxpayers.
5. The E-verification process for Non-Residents is challenging as of now which requires attention from the government for its simplification.
6. Another key area that needs attention is simplification of Tax Deducted Source (TDS) for property and rental transactions involving non-resident individuals. 
7. To make the process easier for non-residents, refund and tax payments should be done through foreign bank accounts. As Budget 2025 comes, all eyes will be on the Honourable Finance Minister to see how individual taxpayers’ expectations are met. 

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