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Key Highlights from the Budget 2025: Tax Relief for Millions
In a key move during the budget speech, Finance Minister Nirmala Sitharaman announced changes to personal taxes that will affect millions of people in India.
Tax Exemption for Income Below Rs 12 Lakh
Individuals earning less than Rs 12 lakh annually will now be exempt from paying income tax. This means many people will no longer have to pay taxes if their income is below this amount.
Standard Deduction of Rs 75,000
A standard deduction of Rs 75,000 has also been introduced. This means if your income is Rs 12.75 lakh, after the deduction, you still fall under the tax-free category. This will help people keep an extra Rs 75,000 to Rs 80,000 each year.
Impact on Spending
By leaving more money in consumers’ hands, the government hopes to boost spending, especially amid rising living costs. This could help stimulate the economy.
More People Will Pay No Tax
The tax exemption will benefit an additional one crore people, reducing the number of taxpayers from 2.4 crore to a significantly lower figure.
Other Key Changes
- Overseas Education Loans: No more Tax Collected at Source (TCS) for bank loans used to pay for overseas education.
- Senior Citizens: The tax deduction limit for senior citizens has been raised from Rs 50,000 to Rs 1 lakh.
- Tax Law Overhaul: The income tax law will be simplified, with fewer words and chapters, making it easier to understand.
- Insurance Sector: Foreign investment in insurance has been increased from 74% to 100%, potentially making insurance more affordable.
Conclusion
These changes aim to ease the tax burden for millions of taxpayers and encourage spending, ultimately supporting India’s economy.