Anticipating Tax Reforms in Union Budget 2025

As India gears up for the Union Budget 2025, there's a growing anticipation among taxpayers for significant tax reliefs and reforms. Finance Minister Nirmala Sitharaman is expected to introduce measures aimed at simplifying tax provisions and stimulating economic growth amidst rising living costs and inflation.

Key Expectations for Individual Taxpayers

One of the primary expectations is an increase in the income tax rebate limit, potentially raising it from Rs 7 lakh to Rs 10 lakh. This adjustment aims to provide relief to middle-income earners, encouraging spending and investment. Additionally, there's a call for revising the deduction limits under Sections 80C and 80D, reflecting the increased cost of living and medical expenses.

Boosting the Real Estate Sector

To rejuvenate the real estate market, the budget may offer enhanced tax benefits for homebuyers. Proposals include increasing deductions on home loan interest or principal repayment, with the current limit of Rs 2 lakh p.a. potentially rising to Rs 3 lakh p.a. This move is expected to support the 'housing for all' initiative and possibly extend benefits under the new tax regime.

Simplifying TDS for Property Transactions

The government is also considering simplifying the TDS process for property purchases from non-resident sellers. The current cumbersome process could be streamlined by introducing a challan-cum-statement system similar to that for resident sellers, making transactions more straightforward for buyers.

As the Union Budget 2025 approaches, these anticipated reforms highlight the government's focus on economic growth, taxpayer relief, and sectoral support. The budget, set to be unveiled on February 1, 2025, is eagerly awaited by individuals and businesses alike, promising to set a new direction for India's fiscal policy.