Budget 2025: Will Finance Minister Nirmala Sitharaman fulfill these 5 expectations of the middle class?

New Delhi: Union Finance Minister Nirmala Sitharaman will present the Union Budget 2025 in Parliament on February 1. The middle class of the country has a lot of expectations from him in this regard. The reason behind this is that no major announcement has been made for the middle class in the budgets of the last one-two years. The middle class, which is facing the brunt of rapidly rising inflation, is now hoping for relief from the government. In such a situation, when the Finance Minister makes big announcements for them in the upcoming budget, their problems will be reduced to a great extent.

Change in basic exemption limit

If relief is to be given to the middle class, then the government should change the Basic Exemption Limit of Income Tax. In the last few years, there has been no major change in the basic exemption limit by the government. In the Union Budget in July 2024, Finance Minister Nirmala Sitharaman had only increased the basic exemption limit in the new income tax regime from Rs 2.5 lakh to Rs 3 lakh. Tax experts say that the government should increase the basic exemption limit to at least Rs 5 lakh in both the new and old income tax regimes.

Change in deduction on home loan

Most of the middle class people take home loan for purchasing a house. House prices have increased significantly since Covid. But, there was no change in the tax benefits on home loans from the government. The government currently allows deduction on home loan interest payments of a maximum of Rs 2 lakh in a financial year under Section 24B of the Income Tax Act. Apart from this, deduction is also available on the principal of home loan under section 80C. Its limit is Rs 1.5 lakh as per section 80C limit. The government should increase the deduction under both the sections.

Range of cities increased for HRA

The scope of cities for 50 percent HRA exemption should be expanded. Currently, only people living in metro cities get 50 percent HRA exemption. Cities like Hyderabad, Pune, Bengaluru, Ahmedabad, Gurugram also need to be brought under its ambit. With this, people living in these cities will also be able to get more tax benefits.

Increasing the limit of section 80C

The government has not increased the limit of Section 80C for the last several years. There are about a dozen investment options under Section 80C. But, its limit is only Rs 1.5 lakh. It needs to be increased to at least Rs 3 lakh. This will provide a lot of relief to the middle class.

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The exemption limit from gift tax should be increased

The government has not made any changes in the exemption limit from gift tax for the last several years. Even today it is Rs 50,000. Gifts worth more than this are taxable. The government needs to increase it to at least Rs 1 lakh. Over the years, the price of Rs 50,000 has decreased due to inflation.