Proposed Changes in Budget 2025 for Income Tax

Adhil Shetty, CEO of BankBazaar, has put forward significant suggestions for the Union Budget 2025, focusing on income tax reforms. The proposals include increasing the 30% income tax slab threshold to Rs 18 lakh, restructuring tax brackets, and implementing a standardised 30% deduction on gross income to alleviate the tax burden on salaried individuals.

Enhancing Income Tax Brackets

Shetty emphasizes the importance of not just increasing the tax-free income limit but also enhancing income tax brackets to ensure fairness across all income levels. This approach aims to distribute the tax responsibility more equitably among higher-income earners, addressing concerns about the current tax structure's impact on different income groups.

Encouraging Savings with Flat Deductions

With the decline in long-term savings and insurance adoption, Shetty advocates for a 30% flat deduction on gross income, capped at ₹15 lakh. This proposal is designed to incentivize savings, insurance, and long-term financial planning, which are crucial for household stability, especially in times of economic slowdown and stagnant incomes.