Budget 2025: Will Government propose Tax-Free Income of up to Rs.10 Lakh in Budget?

With growing buzz about income tax plans in the Union Budget 2025, the government may present two significant measures that could provide relief to the salaried class.

Annual income of up to Rs.10 lakh could be tax-free, while a new 25% tax bracket for incomes of Rs.15-20 lakh may be announced, according to reports. If these changes are implemented, they could make the new tax regime even more appealing while also increasing consumption.

It should be mentioned that currently, a 30% tax is imposed on income over Rs.15 lakh.

A government source quoted in the report stated that they are considering both possibilities in the run-up to the budget. If the budget allows, these proposals will be implemented, bringing significant relief to a huge number of salaried taxpayers.

The report noted that the implementation of these two measures could result in an additional revenue burden ranging from Rs.50,000 crore to Rs.1 lakh crore.

Given that the measures will boost consumption and economic development, the government may view them as strategic investments aimed at revitalising the economy.

While many reports suggest that tax relief measures would be included in the budget, Finance Minister Nirmala Sitharaman is unlikely to make any substantial announcements. This is because the government’s priorities will be to improve public infrastructure, create new jobs, and consolidate the budget.