Budgets come and go leaving behind a sea of unfulfilled expectations of taxpayers. However, Budget 2025 will long be remembered as one of the few Budgets that warmed the cockles of middle-class hearts. In fact, before the Budget was presented, an impression was created that it would benefit the middle class immensely and at the beginning of the Budget Session, PM Modi sought special blessings of Goddess Lakshmi for the poor and middle class. FM Sitharaman obliged, making incomes up to Rs.12 lakhs tax free ~ a benefit of Rs.80,000; for salaried individuals, who are entitled to standard deduction, income up to Rs 12.75 lakhs would be exempted from tax. This largesse is not for everyone; persons filing returns under the old tax regime will continue to be taxed as before.

Also, lower tax rates will kick in from assessment year 2026-27, that is for income earned during financial year 2025-26. Another positive is that taxpayers owning two houses that are not rented out may claim both to be self-occupied, which would save them from having to pay tax on notional rent receivable from the second house. TDS provisions have been am – ended so that there would be no TDS for interest payouts up to Rs.1 lakhs and rent payments up to Rs.50,000 per month. The increase in the threshold for collecting TCS on foreign remittances from Rs 7 lakh to Rs 10 lakh, will benefit many households that have children studying abroad.

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The majority of other amendments in income-tax provisions are aimed at rationalisation and are not of much interest to laymen. Coming to indirect taxation, seven tariff rates have been removed for customs duty, leaving only eight tariff rates including the ‘zero’ rate. However, in most cases where Basic Customs Duty has been removed or reduced, a cess has been imposed leaving the amount of duty payable unchanged. A question that may agitate the minds of taxpayers could be as to why the old tax regime was not phased out for individuals, because the old scheme could be........

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