Once instituted in 2025, the proposed reforms in income tax will favor several taxpayers. In future budgetary provision measures, many categories of individuals may lose income tax exemption in heavy write-offs. Relief to these segments of the population would also be financial relief for the middle class, which includes the elderly who sometimes find it difficult to meet even basic needs.
Who Will Be Tax Free?
1. Senior Citizens Above 75-Year-Olds
As mentioned by the government, senior pensioners above the age of 75 will not be required to file income tax returns anymore. The banks will help in tax liability adjustment against their income directly relieving them of filing such tax returns.
2. Poor-Earning Individuals
Within the new tax regime, the threshold of the basic exemption is set to increase from 2.5 lakh to 5 lakh, making it a complete exemption from personal taxation for those whose annual earning doesn’t cross 5 lakh. If so, it will mean a great deal for each of those in either the middle or marginal classes.
3. Holders Of Agricultural Income
Section 10(1) of the Income Tax Act provides that farmers or other nonworking individuals with agri income as their only income source are free from taxes on such income. Because of these new specifications, farm hands, in reality, may undergo some easier methods of paying taxes against the their income.
4. Benefits For Handicapped People
Enhanced tax exemptions for disabled people could be one of the things announced by the government. The blind people under Sections 80U and 80DD also have beneficial tax provisions, and these might get adapted to provide enhanced relaxations.
5. Female Entrepreneurs And Start-Ups
An exclusive special announcement may harpoon deductions and exemptions for female entrepreneurs, as an extra effort to fuel more participation of women in business enterprise. Other tax benefits may be extended to start-ups and MSMEs to further boost the economy.
Other Expected Tax Reform Measures In 2025
Standard Deductions have Increased: There should be some standard deductions which will be maintained at an amount higher than ₹50,000, allowing a corresponding decrease in taxable incomes of all salaried employees.
Higher Tax Deductions Under 80C : Increasing the deductions under Section 80C beyond the existing ₹1.5 lakh level will only serve to aid the taxpayer in putting more away in PPF, LIC, and ELSS investments.
Lower Tax Slabs Under the New Regime: The new introduction and reshuffle of tax brackets made it more popular as far as taxes charged under such categories to middle-earners are concerned.
Conclusion
New income tax will majorly benefit the tax-collecting public, especially senior citizens and low-income earners and some very specific segments. Educating people about all the new tax-saving gadgets and exemptions launched by the government is going to become very important. be above ₹50,000 to allow corresponding reductions in taxable income for all salaried employees.
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