Budget 2025-26 expected to introduce tax benefits for earners up to Rs 15 lakh

The upcoming Budget for 2025-26 is likely to bring in major tax benefits for individuals earning up to Rs 15 lakh annually. These proposed changes aim to increase disposable income, particularly in urban areas, where most taxpayers reside. Sources indicate that the government is considering adjustments to the income tax regime introduced in FY 2020-21, which has gained popularity among taxpayers due to its simplified structure and regular improvements.

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Under the current system, income up to Rs 3 lakh is tax-free, and different tax slabs apply for earnings above that threshold. Earnings between Rs 3 lakh and Rs 6 lakh are taxed at 5%, while higher income brackets are taxed at 10%, 15%, 20%, and 30%, respectively. Additionally, a standard deduction of Rs 75,000 ensures that those earning up to Rs 7.75 lakh are not taxed.

Reports suggest that the government may increase the basic exemption limit from Rs 3 lakh to Rs 4 lakh, with adjustments to other slabs, making the tax regime more favorable for individuals earning up to Rs 14 lakh. These changes are seen as a response to rising inflation, which has diminished purchasing power, particularly in urban centers. Experts believe that such revisions will encourage spending by reducing the tax burden, providing much-needed relief to taxpayers.