New Delhi: Union Finance Minister Nirmala Sitharaman is slated to present the Union Budget 2025 on February 1 in the Parliament. This will be the second Budget by the BJP-led NDA government since it was re-elected last year.
This year, Finance Minister Nirmala Sitharaman will become the first finance minister in India’s history to deliver eight consecutive budgets. She will surpass the record previously held by Morarji Desai, who presented six consecutive budgets between 1959 and 1963.
According to Article 112 of the Constitution, the government is required to present a statement of estimated income and expenses for each financial year, which runs from April 1 to March 31, to the Parliament.
The relaxation in income tax is given by the Union government in 3 ways — exemption, deduction and rebate. As per experts, these 3 terms has its own connotation and meaning different from the other.Tax Exemption: Income tax exemption means no tax will be levied. Currently, income tax is exempt up to a total annual income of Rs 3 lakh. Various exemptions have been given under the Income Tax Act, 1961.
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Tax Deductions: Income tax deductions pertain to specific deductions which a taxpayer is eligible for on account of investments made (Section 80C) or sum expended (Section 80D or Section 80E). Tax exemption means no tax to be levied on the income, tax deduction is reduction of taxpayer’s gross income on which tax shall be calculated.’
Tax Rebate: The tax rebate is different from exemption and deduction. Under the rebate, a limit is fixed up to which the income is tax-free under Section 87A of the Income Tax Act, 1961. However, if the annual income exceeds the limit, tax on whole income tax is to be paid.
Current Basic Exemption Limits (FY 2024-25)
Old Regime:
Individuals below 60 years: Rs 2,50,000.
Senior citizens (60–80 years): Rs 3,00,000.
Super senior citizens (80+ years): Rs 5,00,000.
New Regime: Uniform exemption: Rs 3,00,000 for all taxpayers.
Common Exemptions
House Rent Allowance (HRA): Exempt for rent paid, subject to specific conditions.
Leave Travel Allowance (LTA): Exempt for travel expenses within India.
Agricultural Income: Fully exempt under the Income Tax Act.
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