EY's Recommendations for Budget 2025

EY, a leading consultancy firm, has put forward significant recommendations for the upcoming Union Budget 2025, focusing on personal tax relief. The firm suggests raising the basic exemption limit from Rs 3 lakh to Rs 5 lakh under the new tax regime and reducing income tax rates, especially for lower-bracket taxpayers. This move aims to provide much-needed relief to the salaried class and stimulate economic growth.

Simplifying Tax Laws and Reducing Litigation

EY also emphasizes the need for simplifying tax laws and reducing litigation. The firm recommends removing the cap on the set-off of house property losses against other heads and including tier-2 cities in the HRA exemption at 50%. These measures are expected to bring tax parity and reduce the compliance burden on taxpayers.

Focus on Emerging Financial Areas

With the rise of digital assets, EY calls for clear guidelines on the taxation of cryptocurrency and non-fungible tokens (NFTs), including the treatment of virtual digital asset (VDA) losses. The firm also suggests deferring TDS on PF interest above Rs 2.5 lakhs until the withdrawal stage and extending the ESOP tax deferment benefit to all employers.