Income Tax relief: When were big tax cuts last announced? All eyes on Budget 2025

New Delhi: Several economists have advocated for an Income Tax cuts announcement from the government in Union Budget 2025. Meanwhile Reuters reported that the Modi 3.0 government may go ahead with tax rate cuts in the Budget that will be presented by Union Finance Minister Nirmala Sitharaman on February 1, 2025. In this article, let’s see when was the last major income tax relief given by the central government.

In an attempt to provide significant relief to the individual taxpayers and to simplify the Income-Tax law, the Modi government in Budget 2020-21 introduced a new income tax regime, wherein income tax rates were significantly reduced for the individual taxpayers who forego certain deductions and exemptions. The changes that were announced in tax slabs are listed in the following table:

Simplification to be the focus for taxation in 2025

Meanwhile, simplification of direct and indirect tax policies is expected to be the main focus area for the government in 2025. The government is set to start the review of the six-decade-old income tax law and rationalisation of the GST rate in 2024.

With monthly gross GST collections stabilising at around Rs 1.8 lakh crore and gross direct tax collections steadily rising at 20 per cent rate, the effort to ease compliance burden for individuals as well as corporates will gain traction.

The government is also reviewing the Income Tax Act, 1961, and is contemplating on making it simple and easier to understand. PTI reported that the government is expected to propose amendments to the I-T law to remove the obsolete provisions and make it concise and introduce in Parliament during the upcoming Budget 2025 session.

 Economists are urging income tax cuts in India’s Union Budget 2025. The Modi government may implement tax rate reductions, potentially simplifying the Income Tax Act of 1961. The last significant tax relief was in Budget 2020-21, introducing a new regime with lower rates but fewer deductions.  Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today