Budget 2025: A refreshing change for every taxpayer

The 2025 Union Budget was one of the most anticipated in recent years, especially by the common man and every hardworking taxpayer. After years of navigating a complicated and sometimes daunting tax system, the government’s focus on simplification and reform is a welcome change.

The government’s slogan of sabka saath, sabka vikas, sabka vishwas (Together, for everyone’s progress, with everyone’s trust) rings true in this year’s Budget, as it addresses the needs of taxpayers and aims to make the tax process simpler and more accessible.

From salaried individuals to homeowners and business owners, this Budget promises real relief and an easier, more transparent tax system. This shift marks a positive direction towards a tax system that benefits the common man and contributes to economic growth.

Income tax relief and reform

One of the most significant reforms in this year’s Budget is the decision to raise the income-tax exemption limit to Rs 12 lakh, eliminating the tax burden for salaried individuals earning up to this threshold. The change brings much-needed relief to millions of taxpayers, especially middle-class families. The increase in disposable income will likely stimulate domestic consumption, savings, and investments, contributing to the broader economic growth.

Also read | What Budget 2025 means for salaried taxpayers, senior citizens and investors

For individuals earning above Rs 12 lakh, the Budget continues to offer substantial tax relief, with savings ranging from Rs 70,000 to Rs 1 lakh annually, depending on income levels. This creates a more equitable tax structure, ensuring that relief is extended across various income groups.

Simplification of the tax system

This year’s Budget lays a strong emphasis on simplifying the tax system. The government plans to introduce a new Income Tax Act that will reduce the complexity of current laws, making them easier to navigate and understand. By streamlining the rules and eliminating ambiguities, the government aims to make compliance simpler for taxpayers, ensuring greater clarity and confidence in fulfilling tax obligations.

Changes to Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) are also being introduced to improve transparency and efficiency. These will reduce administrative burden for individuals and businesses, minimising errors and ensuring smoother compliance.

Relief for Homeowners with Multiple Properties

Homeowners will benefit from significant tax relief, especially those with multiple properties. The government has exempted taxes on up to two self-occupied properties, easing the financial burden for those who own more than one home. This reform makes homeownership more accessible and encourages long-term investment in real estate.

Also read | How FM Nirmala Sitharaman's Budget will help the middle class

Impact on domestic consumption and economic growth

The increased tax exemptions and relief measures are expected to have a far-reaching impact on the economy. With more disposable income, consumers will have the ability to spend on goods and services, thereby driving demand and boosting domestic consumption. This, in turn, will have a positive impact on the economy, supporting growth across sectors.

The focus on savings and investments will foster long-term financial security, contributing to a healthier economic ecosystem.

Verdict : A Budget for inclusive growth

The overarching theme of the 2025 Union Budget is simplification and accessibility. By reforming income-tax laws and introducing clear, concise policies, the government is creating a more inclusive tax system that works for everyone. The Budget aims to address the needs of all taxpayers, from salaried individuals to business owners, promoting equitable growth while easing the financial burden on the common man.

With reforms like increased income-tax exemptions, streamlined TDS and TCS processes, and a simpler tax system, the government is fostering a more taxpayer-friendly environment. As the government continues to champion sabka saath, sabka vikas, sabka vishwas, this Budget exemplifies its commitment to progress and a thriving economy for the future.

Also read | Save more, spend more, live better with Budget 2025

Whether you are a salaried individual, retired, or a business owner, everyone has a reason to cheer for this Budget.

The author is co-founder and CEO of Germinate Investor Services