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Budget 2025-26 should prioritise giving tax relief by raising income tax exemption to Rs. 5 lakh
Union Budget: EY India proposes personal tax relief and the deferment of TDS on PF interest rate in the upcoming union budget 2025-26. They recommend simplifying the tax system, reducing litigation, and providing clarity on cryptocurrency and NFT taxation. Proposed reforms include rationalising capital gains structures and removing house property loss set-off caps.
India Budget: The Union Budget 2025-26 should prioritise giving tax relief to common taxpayers by raising the basic exemption limit in the new tax regime from 3 lakh to 5 lakh and lowering tax rates, according to Ernst & Young India (EY India), a global consulting firm.
EY India also recommended delaying the tax deduction at source (TDS) on provident fund (PF) interest above 2.5 lakh until the withdrawal stage to reduce the compliance burden on taxpayers.
In the last budget, some TDS rate rationalisation was introduced. EY India suggested further simplifying the TDS structure by grouping rates into 3–4 broad categories with lower rates and excluding specific items from TDS entirely.
"While a full comprehensive review of the direct tax code may take time, we might see some initial steps toward its implementation in this Budget. I also hope for a reduction in personal income tax, particularly for the lower-income groups, to provide relief and stimulate demand," said Sameer Gupta, National Tax Leader, EY India.
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