Kolkata: Two financially significant events have taken place in April. One, Budget 2025 and the rate cut by Reserve bank of India. While the direct tax proposals will help in making significant savings by way of reducing income tax outgo from the next financial year that begins in a few weeks, the RBI Repo Rate cut by 25 basis points will also help decreasing EMI burden on anyone who is paying off loans currently. This reduction in EMIs will happen in home loans, car loans, personal loans and, in fact, any type of loan.
The income tax proposals in Budget 2025 have said that anyone earning up to Rs 12 lakh, which actually will go up to Rs 12.75 lakh a year due to standard deduction, won’t have to pay any income tax at all. Therefore compared to the current slabs and rates, the extra cash will be significant.
Income tax savings in 2025-26
According to EY India calculations, the following will be the quantum of income tax saved after the Budget:
- Taxable income Rs 12.75 lakh: Savings Rs 83,200
- Taxable income Rs 15 lakh: Savings Rs 32,500
- Taxable income Rs 16 lakh: Savings Rs 40,300
- Taxable income Rs 20 lakh: Savings Rs 85,800
- Taxable income Rs 25 lakh: Savings Rs 114,400
- If you add to this any reduction in EMI that some might have, it will amount to a significant amount.
Sukanya Samriddhi Yojana
Let’s assume that the person who is earning Rs 12.75 lakh a year invests the total income tax saving available to him/her in Sukanya Samriddhi Yojana, which is a scheme exclusively for the future of the girl child. A Sukanya Samriddhi Yojana (SSY) calculator will show that if Rs 83,200 is invested in the SSY scheme every year, the scheme will accumulate Rs 38,42,497, or Rs 38.42 lakh, at the end of the tenure in 2046. What’s significant is that one does not have to make any extra saving to invest this amount — just the amount of tax that one will save in FY2026 will be enough to start the investment journey. Of the total amount, Rs 12,48,000 will be the out-of-pocket investment while Rs 25,94,497 will accrue by way of interest income.
By the way, one can begin investing in SSY with a minimum annual amount of Rs 250, while the maximum amount is Rs 1.5 lakh. The interest in this completely secure instrument is 8.2%. However, it must be mentioned that one could consult a personal finance expert before committing one’s hard-earned money in any scheme.
Finance minister Nirmala Sitharaman’s income tax proposals could put some extra cash in the hands of the common taxpayer from the next financial year that begins from April. If you have been paying EMI on loans, the RBI rate cut proposal will also help in saving some money be reducing instalments. If you want to know how to use this extra cash to invest securely for your girl child, read on. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
