Budget 2025 expectations LIVE updates: Experts said the following:
“1. Higher tax exemption limits under Section 80C: The current limit of ₹1.5 lakh under Section 80C is too narrow, given the variety of eligible investments like EPF, PPF, ELSS, insurance premiums, and home loan principal repayment. Raising this limit to ₹2.5 lakh would provide much-needed relief to taxpayers and encourage long-term savings.
2. Increase in the standard deduction for salaried individuals: With rising inflation, the standard deduction of ₹50,000 feels inadequate. Increasing it to ₹75,000 or ₹1 lakh would help salaried individuals manage their disposable income better and boost consumption.
3. Tax parity between mutual funds and ULIPs: Currently, ULIPs enjoy tax-free maturity benefits under Section 10(10D), unlike mutual funds. The government should aim to create a level playing field for all investment products, promoting fair competition and informed investment decisions. Also, switching between schemes in a ULIP levies no tax while in Mutual Funds, it does which needs to be addressed.
4. Incentives for long-term equity investment: Reintroducing the long-term capital gains (LTCG) tax exemption for equity investments held for more than three years or increasing the threshold limit (currently ₹1 lakh) could motivate retail investors to stay invested in equity markets longer, promoting financial discipline.
5. Reduction in GST on financial products and services: Financial services like mutual fund management fees, insurance premiums, and brokerage charges currently attract 18% GST. A reduction in GST rates for such essential services to 12% or lower could encourage broader participation in organized financial markets which still remains pathetically low.
6. Greater focus on retirement savings: The government should consider:
o Introducing higher tax benefits for NPS contributions, especially for Tier-II accounts.
o Creating a special tax-saving category for retirees who are heavily dependent on fixed-income investments.
7. Enhancements in Sovereign Gold Bond (SGB) schemes: As physical gold remains culturally significant, promoting SGBs with higher interest rates or additional tax benefits for longer-term holdings could encourage financial gold ownership over physical gold.
8. Tax-free income on green investments: To align with India’s sustainability goals, introduce tax-free bonds for green infrastructure projects or offer tax deductions for investing in environmentally friendly funds.
A smart budget lays the foundation for smarter financial decisions—here’s hoping the government crafts a budget that respects our money’s hard work!”
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