Budget 2025: The continuation of the benefits of HRA in the new income tax regime of Finance Minister Nirmala Sitharaman will further increase the interest of employed people.
This will also increase the number of taxpayers. The government is constantly trying to attract taxpayers towards the new regime.
Tax experts’ opinion: Emphasis on reducing deductions and exemptions
According to tax experts, the government’s focus is on reducing tax deductions and exemptions, so that the new tax regime can become more attractive. Kuldeep Kumar, partner of Mainstay Tax Advisors, says, “In last year’s budget, the Finance Minister had increased the standard deduction and also made changes in the tax slabs. This time too, people’s spending capacity will increase due to tax relief.”
Benefits of HRA in the new regime
If the government decides to give HRA in the new regime as well, it will prove beneficial for the middle class. Claiming HRA reduces the tax burden on taxpayers. This will increase the number of employed people adopting the new regime and will also increase the interest of taxpayers.
Tax relief will increase consumption
Industry representatives and economists have advised Finance Minister Nirmala Sitharaman to take measures to increase consumption. Due to inflation and high interest rates, people are not showing interest in spending. If the government reduces the burden of income tax, people will have more money left, which will make them spend more and increase economic activity.
Big announcement expected in the budget to increase the attraction of the new regime
Salaried people have many expectations from the Union Budget to be presented on February 1, 2025. It is believed that the Finance Minister can make big announcements to make the new tax regime more attractive. These may also include the benefits of HRA. Tax experts believe that this time there may be more announcements for the new regime than for the old regime.
Conclusion
The continuation of HRA benefits in the government’s new tax regime will provide relief to the working class and increase the number of taxpayers. Tax cuts will increase consumption, which will accelerate economic activities.