Finance Minister Nirmala Sitharaman is set to present the Union Budget for the year 2025-26 on February 1, and it is expected to bring significant relief to salaried individuals. One of the major highlights is the proposed increase in the tax exemption limit, which is likely to be raised to ₹10 lakhs from the current ₹7.75 lakhs. This change will be part of the government’s efforts to ease the financial burden on taxpayers. Additionally, the standard deduction, which currently stands at ₹75,000, is also anticipated to see an increase.
Another key proposal is the revision of income tax slabs. At present, individuals with an annual income exceeding ₹15 lakhs are taxed at 30%, but reports suggest that this rate could be reduced to 25% for those earning up to ₹20 lakhs. This change would provide significant tax relief for high-income earners, easing the financial pressure on them. The reduction in tax rates is expected to benefit a large number of salaried individuals who fall under this income bracket.
The government’s decision to provide tax relief is also likely to stimulate consumer spending. With more disposable income in hand, individuals are expected to increase their spending, which in turn could have a positive impact on the economy. The proposed changes in the budget are seen as a move to boost economic activity while providing much-needed relief to taxpayers.