NO INCOME TAX UP TO 15 LAKHS BUDGET 2025
SOURCE THE ECONOMIC TIME
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NO INCOME TAX UP TO 15 LAKHS BUDGET 2025

INCOME TAX 2025
Monday,January 13, 2025
the upcoming budget presentation by the Indian government, particularly focusing on the potential tax relief for middle-class individuals earning up to ₹15 lakh annually. The speaker indicates that there are discussions in the media suggesting that the government might increase the current tax exemption threshold from ₹7 lakh to ₹15 lakh.
SOURCE THE ECONOMIC TIME

NO INCOME TAX UP TO 15 LAKHS BUDGET 2025

the upcoming budget presentation by the Indian government, particularly focusing on the potential tax relief for middle-class individuals earning up to ₹15 lakh annually. The speaker indicates that there are discussions in the media suggesting that the government might increase the current tax exemption threshold from ₹7 lakh to ₹15 lakh.

This change could significantly benefit urban middle-class taxpayers, who are currently facing economic challenges due to high inflation and slow consumption rates. The speaker also reviews the implications of the current tax regimes and the government’s need to stimulate economic growth, given the recent decline in GDP growth rates. The video concludes with economists engaged in ongoing discussions about tax reforms. They are also considering the potential simplification of the income tax structure.

NO INCOME TAX

  • The Indian government may consider increasing the tax exemption threshold from ₹7 lakh to ₹15 lakh.
  • Current inflation and economic conditions are pressuring the government to provide relief to the middle class.
  • The GDP growth rate has significantly declined, prompting concerns about consumer spending.
  • The new tax regime offers different benefits compared to the old one, affecting taxpayers based on their income levels.
  • The government is exploring ways to boost economic growth through potential tax cuts and simplified tax structures.
  • Recent reports suggest that the RBI’s monetary policies may be affecting economic performance.
  • Discussions are underway regarding a comprehensive review of the Income Tax Act, which has not been updated since 1961.

Key Insights

  • Increasing Tax Exemption Threshold: If the government raises the tax exemption limit to ₹15 lakh, it would relieve millions of taxpayers. This move is expected to stimulate consumption, which is crucial for economic recovery during a period of slow growth. By allowing higher disposable income, this could enhance the purchasing power of the middle class, leading to increased demand for goods and services.
  • Economic Slowdown Concerns: The recent GDP growth of 5.4% is considerably lower than expected, indicating a worrying trend for the economy. With predictions from economists being revised downward, this situation highlights the urgent need for the government to stimulate economic activity, particularly among the middle class, who are significant contributors to consumer spending.
  • Impact of Inflation on Consumption: The video emphasizes how high inflation is adversely affecting the middle class, leading to reduced purchasing power. The need for tax relief is underscored by the observation that urban areas are particularly affected by rising living costs, which can be alleviated through better tax policies.
  • Divergence Between Old and New Tax Regimes: The speaker explains the differences between the old and new tax regimes, where the choice of regime can significantly impact taxpayers. The new regime allows for higher income tax exemptions but less flexibility in terms of deductions, which may deter some taxpayers from opting for it.
  • RBI’s Role in the Economic Landscape: The government is partly blaming the Reserve Bank of India’s (RBI) monetary policy for the economic slowdown. The failure to reduce the repo rate has made loans more expensive, which could hinder consumption and investment, further complicating the economic recovery.
  • Potential Tax Reforms: The discussions about reviewing the longstanding Income Tax Act of 1961 indicate that the government is considering reforms aimed at simplifying the tax filing process and making compliance easier for taxpayers. This could have long-standing implications for how tax is structured in India.
  • Ongoing Government Discussions: Recent meetings between Prime Minister Narendra Modi and economists reflect the seriousness of the government’s approach to tackling economic issues. These discussions show a willingness to consider substantial changes in tax policy to promote growth and ease the financial burden on citizens.

FAQs

  • Q1: What is the proposed tax exemption threshold for the upcoming budget?
    A1: The proposed tax exemption threshold for the upcoming budget may be increased from ₹7 lakh to ₹15 lakh for individuals, which would mean no income tax for those earning up to ₹15 lakh annually.
  • Q2: Why is the middle class a focus for the government in this budget?
    A2: The middle class is a focus because they are significantly impacted by high inflation and economic downturns. Relief measures for this demographic are seen as a way to boost consumption and stimulate economic growth.
  • Q3: How has the GDP growth rate changed recently?
    A3: The GDP growth rate has dropped to 5.4%, which is below expectations. This decline has raised concerns among policymakers about the state of the economy and its recovery trajectory.
  • Q4: What are the differences between the old and new tax regimes?
    A4: The old tax regime allows for various deductions and exemptions, while the new tax regime offers a lower tax rate structure with fewer deductions. Taxpayers can choose between the two based on their financial situations and preferences.
  • Q5: What role does the RBI play in the current economic situation?
    A5: The RBI’s monetary policy, particularly the decision to keep the repo rate high, is believed to be contributing to the economic slowdown by making borrowing more expensive, which in turn affects consumer spending and investment rates.

REFERENCE :-https://www.youtube.com/watch?v=u87wfE3QylQ

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