SOURCE : NEW18 NEWS
Last Updated:January 12, 2025, 12:26 IST
Budget 2024 Expectations India: Check Top Taxpayer Demands for Finance Minister Nirmala Sitharaman
Union Finance Minister Nirmala Sitharaman showcases a tablet wrapped in a red pouch carrying the Budget documents, outside the Finance Ministry. (File photo/PTI)
Budget 2025 Expectations Income Tax: As Budget 2025 approaches, taxpayers and the business community alike are anticipating key reforms aimed at enhancing financial relief and simplifying the tax system. According to CA Anuj Garg, Director – Taxation at AHSG & Co LLP, the upcoming budget could bring much-needed relief to individual taxpayers and promote the growth of start-up companies in India.
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Raising the Minimum Slab Rate for Taxpayers
One of the major recommendations put forth by Garg is to increase the minimum slab rate for individual taxpayers under the new tax regime. At present, individuals with annual income up to Rs. 3 lakh do not pay any tax, but Garg believes this limit should be raised to Rs. 5 lakh. This step, he suggests, would provide immediate relief to middle-income taxpayers, stimulating consumption and boosting economic activity.
Enhancing Rebate for Lower-Income Taxpayers
Currently, taxpayers with income up to Rs. 7.5 lakh who opt for the new tax regime enjoy a 100% rebate. Garg advocates raising this rebate limit to Rs. 10 lakh, extending this benefit to a larger section of the population and enhancing disposable income for lower and middle-income earners.
Revised Exemption Limit for Long-Term Capital Gains
Another key recommendation focuses on the taxation of Long-Term Capital Gains (LTCG) arising from the sale of equity shares, equity-oriented mutual funds, and similar assets. Garg proposes raising the exemption limit from Rs. 1 lakh to Rs. 2-2.5 lakh. This change, he argues, would incentivize equity investments and provide much-needed encouragement to the country’s capital markets, which have seen fluctuating participation in recent years.
Simplification of TDS Process for Non-Resident Property Sellers
The tax filing process for Non-Resident Indians (NRIs) selling property in India remains cumbersome. Homebuyers are currently required to withhold 1% TDS on property transactions exceeding Rs. 50 lakh. However, if the seller is a non-resident, the homebuyer must first obtain a Tax Deduction Account Number (TAN) and follow a complex procedure to deduct TDS at the prevailing rate. Garg proposes simplifying this process to match the ease of transactions with resident sellers, allowing TDS to be deducted only on the capital gains portion or introducing a lower, more standardized rate.
Extension of Sunset Clause for Start-ups
A strong proponent of India’s start-up ecosystem, Garg also calls for the extension of the sunset clause under Section 80-IAC of the Income Tax Act. The section allows eligible start-ups to claim a 100% deduction on profits for three consecutive years out of the first ten years of their operation, provided they are incorporated between April 1, 2016, and March 31, 2025.
To further encourage the growth of start-ups, Garg urges the government to extend the period of incorporation for these businesses, ensuring continued support and alignment with the vision of Prime Minister Narendra Modi to foster innovation and entrepreneurship across the country.
These proposed changes, according to Garg, aim to not only offer financial relief to individual taxpayers but also to stimulate investment and foster a more inclusive economic environment in the country. As the government continues to focus on inclusive growth and innovation, the hope is that Budget 2025 will lay the groundwork for a more efficient and tax-friendly India.
Union Budget 2025 Date
Finance Minister Nirmala Sitharaman is expected to present India’s Union Budget 2025 on Saturday, February 1, 2025.
