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Budget 2025: Anticipated Relief on HRA, the limit for 80C and Standard Deduction Limit

Finance Minister Nirmala Sitharaman is to present Budget 2025 on February 1, and there are expectations of higher tax exemptions. Experts demand raising the standard deduction to ₹1 lakh, increasing the 80C investment limit, and including HRA benefits in the new tax regime for better savings.
 
Budget 2025 tax changes

Taxpayers are waiting with bated breath for relief measures in Budget 2025 as high inflation and rising expenses are putting a lot of pressure on the pockets of people. The government might make the new tax regime more attractive by raising the limits of deductions and exemptions.

Experts are demanding higher tax benefits under sections 80C, HRA exemptions, and standard deductions, which would ease the burden on taxpayers.

Standard Deduction May Rise to ₹1 Lakh

The standard deduction that offers relief to the salaried persons is now at Rs 75,000 in the new regime and Rs 50,000 in the old one. It may be hiked to Rs 1 lakh by the government so that benefits from both regimes can accrue to them.

Investment Limit Under Section 80C to Rise

Now, under Section 80C of the Income Tax Act, 1961, tax deductions on investments amounting to only ₹1.5 lakh are allowed presently in:

  • PPF (Public Provident Fund)
  • LIC (Life Insurance Policies)
  • PF (Provident Fund)
  • Home Loan Principal Repayment

This limit has not changed in years, and experts demand it to be increased to ₹2 lakh, allowing more tax savings.

HRA Exemption for New Tax Regime?

Currently, HRA exemptions are permitted only under the old tax regime. However, experts believe extending this benefit in the new tax regime will immensely help salaried individuals to earn significant tax relief and make this new tax system more attractive to them.

Revised Home Loan Tax Benefits

Currently, under Section 80EE, taxpayers can claim a deduction of up to ₹50,000 per year on home loan interest payments. Most homebuyers and tax experts are demanding the government to raise this limit, thereby making housing loans more affordable.

Also Read: Elon Musk's X Partners with Visa to Bring Digital Payments - Envisions Becoming an 'Everything App'

What to Expect on February 1?

With growing demands for tax relief, the government is likely to review and enhance tax benefits in Budget 2025. Whether it’s higher standard deductions, increased 80C limits, or new HRA exemptions, taxpayers are optimistic about significant reforms in the upcoming budget.
 

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