FM Sitharaman to Present 8th Budget, Focus on Taxation Expected

Finance Minister Nirmala Sitharaman will present the Union Budget 2025-26 in Lok Sabha at 11 AM on Saturday. This budget will highlight the government's financial roadmap, including taxation policies, revenue distribution, and economic strategies. One of the most anticipated announcements is potential tax reforms, such as a revised income tax structure and possible removal of the old tax regime. Reports also suggest a proposal to eliminate income tax for individuals earning below ₹10 lakh per year, though no official confirmation has been provided.

Tax Regimes: Old vs. New

Currently, taxpayers can choose between two tax structures:

1. Old Tax Regime – Provides tax exemptions on housing rent, insurance premiums, and other deductions.
2. New Tax Regime – Introduced in 2020, offering lower tax rates but fewer deductions.

While salaried employees can opt for either regime annually, individuals with business or professional income have the new tax regime as the default option from FY 2023-24.

Tax Reforms from the Last Budget

The 2024 budget introduced significant revisions, including:

• Adjustments to tax slabs, saving taxpayers up to ₹17,500 annually.
• Higher standard deduction limits, raised from ₹50,000 to ₹75,000 for salaried individuals and from ₹15,000 to ₹25,000 for family pensioners.
• Capital gains tax updates: Short-term capital gains tax increased from 15% to 20%, while long-term capital gains tax rose from 10% to 12.5% for equity investments.
• Higher exemption threshold for long-term capital gains, revised from ₹1 lakh to ₹1.25 lakh.

Income Tax Slab Rates (2025)

New Tax Regime:

• ₹0 – ₹3 lakh: No tax
• ₹3 – ₹7 lakh: 5% tax on income exceeding ₹3 lakh
• ₹7 – ₹10 lakh: ₹20,000 + 10% tax on income exceeding ₹7 lakh
• ₹10 – ₹12 lakh: ₹50,000 + 15% tax on income exceeding ₹10 lakh
• ₹12 – ₹15 lakh: ₹80,000 + 20% tax on income exceeding ₹12 lakh
• Above ₹15 lakh: ₹1,40,000 + 30% tax on income exceeding ₹15 lakh

Old Tax Regime:

• Up to ₹2.5 lakh: No tax
• ₹2.5 – ₹5 lakh: 5% tax on income exceeding ₹2.5 lakh
• ₹5 – ₹10 lakh: ₹12,500 + 20% tax on income exceeding ₹5 lakh
• Above ₹10 lakh: ₹1,12,500 + 30% tax on income exceeding ₹10 lakh

How to Calculate Your Tax Liability?

Individuals can estimate their tax using the official Income Tax Department’s online calculator by following these steps:

1. Visit the Income Tax e-filing portal.
2. Select "Tax Calculator" under Quick Links.
3. Choose between the Basic and Advanced Calculator options.
4. Enter details like assessment year, income, deductions, and tax regime.
5. The system will generate an estimated tax liability based on your inputs.

With the Budget 2025-26 announcement approaching, taxpayers are keen to see if any major tax benefits or reforms will be introduced. Stay updated for the latest developments.