Kolkata: Union budget 2025 has spread great cheer among middle-class taxpayers. Through this budget, finance minister Nirmala Sitharaman has recast income tax slabs and income tax rates which will put considerable amounts of extra money into the hands of middle-class salaried people. The RBI has also helped to generate more disposable money by cutting the Repo Rate after a gap of about 5 years which will eventually bring down the interest rates of loans in all banks.
The RBI has trimmed Repo Rate by 25 basis points now and expert agencies hope that this year a total of 75 basis points can be shaved off from the Repo Rate. This would reduce EMIs in existing loans and the cost of future loans — all leading to extra cash in the hands of many. This will happen in home loans, car loans, personal loans etc.
The income tax slabs and savings from April
Budget 2025 has proposed that income tax slabs and rates will result in a situation where anyone earning up to Rs 12 lakh annually won’t have to pay any income tax at all. In fact, if the Rs 75,000 of standard deduction is considered, anyone who is earnings till Rs 12.75 lakh a year, need not pay any income tax. EY India experts have calculated that the following amounts of income tax will be saved in FY26 (next financial year) calculations, the following will be the amount of income tax saved. The savings will be:
- Rs 83,200: When taxable income Rs 12.75 lakh
- Rs 32,500: Taxable income Rs 15 lakh
- Rs 40,300: Taxable income Rs 16 lakh
- Rs 85,800: Taxable income Rs 20 lakh
- Rs 114,400: Taxable income Rs 25 lakh
While these amounts are not small at all, if you add to this any reduction in EMI that some might have, they will rise further.
Invest in mutual fund SIP
SIPs in mutual funds are supposed to be all-weather investments and an investor does not need to watch out for market highs and lows before beginning one. However, the fact that Indian stock market is in a correction phase has raised the attraction of well-managed equity funds. Many equity linked funds provide returns (say for example 5-year returns) well above 20%. But even on a modest scale, if we settle for 15% returns and a monthly investment of Rs 5,000, a SIP can fetch a total value of Rs 4,48,408 in 5 years. If pursued for 10 years, it could accumulate Rs 13,93,286 and Rs 33,84,315 if continued for 15 years. What’s significant is that this money can be built from income tax relief only and one does not have to cut corners at all. However, one should ideally consult an investment expert before investing.
(Disclaimer: This article is only meant to provide information. News9 does not recommend buying or selling shares or subscriptions of any IPO, Mutual Funds and crypto assets.)
Union finance minister Nirmala Sitharaman has announced big bang income tax reliefs in Budget 2025 which will put significant amounts of additional cash in the pockets of the common taxpayer from April 2025. If you are repaying loans in the form of EMIs, this burden could also reduce a bit, thanks to the RBI rate cut decision. One could consider investing the extra cash in mutual fund SIPs. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
