Budget 2025 income tax expectations: Individual and salaried taxpayers want Finance Minister Nirmala Sitharaman to lower the personal tax rates, according to a Grant Thornton Bharat pre-budget survey for Budget 2025.
The survey findings indicate that individual taxpayers are seeking personal tax concessions to boost their disposable earnings. The findings show that 57% of participants want reduced personal income tax rates, whilst 25% support higher exemption thresholds.
According to government data, the new income tax regime has gained substantial acceptance, with 72% of taxpayers choosing this option, leaving only 28% continuing with the old tax regime.
To make the new tax income tax regime more attractive, 46% of survey participants suggest that Budget 2025 should look to lower tax rates, whilst 26% support raising exemption limits.
Budget 2025 Income Tax GT Bharat Survey
Although the government has indicated a potential discontinuation of the old tax regime, 63% of taxpayers continue to request increased benefits under it.
Additionally, respondents are requesting specific benefits, including enhanced provisions for the National Pension Scheme (NPS) and greater tax advantages for electric vehicles to promote environmentally conscious transport choices.
Taxpayers are also advocating for a streamlined tax filing and compliance framework. According to Grant Thornton Bharat’s pre-budget survey, 38% of participants support enabling tax payments through foreign banking institutions, which would simplify compliance procedures for NRIs.
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Additionally, there are calls for improving tax refund processes to overseas banks and implementing e-verification systems that send OTPs to international mobile numbers for taxpayers residing outside India.
Regarding domestic taxation, 56% of survey participants advocate for raising the income threshold for tax filing obligations to ease the burden on smaller taxpayers. The survey also reveals that 32% of respondents favour reducing additional tax for updated returns, whilst 12% request extended deadlines for submitting revised Income Tax Returns (ITRs).
Akhil Chandna, Partner and Global People Solutions Leader, Grant Thornton Bharat said, “The individual taxpayers have big hopes from Union Budget 2025 to offer more tax saving options in terms of reduced tax rates and increasing the standard deduction limit under the new tax regime. An increase in NPS tax deduction limits and more flexible NPS withdrawal rules would certainly promote retirement savings in the hands of taxpayers. Further, to promote a greener environment through the use of electric vehicles (EV), clarity is expected from the Government on perquisite taxation rules for EV usage, and the deduction for the purchase of EVs should be reinstated under the law.”
Finance Minister Nirmala Sitharaman will present the Union Budget on February 1, 2025.
