Taxpayers’ Expectations from Union Budget FY25-26: A Wishlist2 min read
As the Union Budget for FY25-26 approaches, taxpayers across India are buzzing with anticipation. Every year, individual taxpayers, professionals, and businesses eagerly await announcements in the Union Budget that could impact their financial landscape. Let’s delve into the collective aspirations of taxpayers this budget season.
1. Increase in Basic Exemption Limit
Current Scenario: The basic exemption limit stands at ₹2.5 lakh for individuals below 60 years.
Taxpayers are advocating for this threshold to be raised to ₹5 lakh, aligning with inflation and increasing living costs. Source: ET

2. Rationalization of Income Tax Slabs
Current Scenario: The existing tax slabs impose a 5% tax on income between ₹2.5 lakh and ₹5 lakh, 20% on ₹5 lakh to ₹10 lakh, and 30% on income above ₹10 lakh.
Taxpayers hope for a reduction in these rates to increase disposable income and stimulate consumption. Source: ET
3. Enhancement of Section 80C Deduction Limit
Current Scenario: Section 80C allows deductions up to ₹1.5 lakh on specified investments and expenditures.
Given the rising cost of living and the need to encourage savings, there’s a strong demand to increase this limit to ₹2.5 lakh.
Example: If Ramesh invests ₹3 lakh in eligible instruments under Section 80C, currently, he can only claim a deduction of ₹1.5 lakh. An enhanced limit would allow him to benefit from the full investment.

4. Simplification of Tax Compliance Procedures
Current Scenario: Taxpayers often grapple with complex filing procedures and frequent changes in compliance requirements. There’s a pressing need for streamlined processes, reduced paperwork, and more investments into user-friendly digital platforms to ease the compliance burden. Source: PwC

5. Incentives for Digital and Green Investments
Current Scenario: With a global shift towards sustainability and digitalization, taxpayers expect incentives for investments in green technologies and digital infrastructure. This includes tax rebates on electric vehicle purchases, solar installations, and digital upskilling courses.
Example: Seema plans to install solar panels costing ₹2 lakh. A tax rebate of 30% would reduce her tax liability by ₹60,000, making the investment more attractive.
Conclusion
As the Finance Minister prepares to unveil the Union Budget FY25-26, these expectations reflect the collective voice of the nation. Addressing them could lead to increased taxpayer satisfaction, higher compliance, and a boost to the economy. While not all demands may be met, even incremental changes can pave the way for a more prosperous and equitable financial future.
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