Finance Minister Nirmala Sitharaman is expected to announce significant tax relief for the middle class, including possible income tax rebates and new tax slabs. There are hopes for measures to strengthen the rupee and boost the economy. Additionally, the government may restore long-term capital gains indexation for debt mutual funds, and increase the standard deduction limit to ₹1 lakh. Home loan deductions under the new tax regime could also be a major topic of discussion. Expectations is high for more relief in the form of reduced petrol, diesel, and gas prices.
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President Droupadi Murmu Addresses the Joint Session of Parliament
In her speech, she highlighted India’s success in UPI technology, which now drives over 50% of real-time digital transactions. She emphasized that the government has leveraged digital technology to promote social justice and equality.
PM Modi’s Vision for India
PM Modi expressed hope that the country’s poor and middle class would continue to be blessed by Goddess Lakshmi. Reflecting on India’s 75 years as a democracy, he shared his confidence that India will achieve its goal of being a developed nation by 2047.
Income Tax Relief and Home Loan Deductions
There are expectations for an expansion in tax exemptions under sections 80C and 24(B) of the Income Tax Act to help first-time homebuyers, aiming to ease financial barriers.
EWS Category and Affordable Housing
Currently, the EWS category includes families earning up to ₹3,00,000 annually, and affordable housing in urban areas is defined as up to 60 sq meters. There’s speculation about changes in this definition.
Home Loan Tax Expectations
Under the new tax regime, deductions for home loan interest are currently allowed only for rented properties. There are hopes for changes that could extend benefits to homebuyers.
Exports and Indian Currency
The government might announce measures to promote exports and support the Indian rupee in the short term, aiming for long-term economic benefits. Additionally, banks may be allowed to offer higher interest rates to attract foreign deposits.
Standard Deduction Limit
Expectations are that the government may raise the standard deduction limit from ₹75,000 to ₹1,00,000, providing significant relief to taxpayers.
LTCG and Indexation Benefits
The 2024 budget removed indexation benefits for long-term capital gains tax. There are speculations about the restoration of these benefits in the 2025 budget.