Income Tax Slabs 2025-26 Budget 2025 Live Updates: Will FM Sitharaman provide income tax relief, tweak income tax slabs & rates for salaried taxpayers?

Since the Government already changed tax slabs in the last budget period major tax rate changes seem improbable for this budget. Surabhi Marwah who serves as Tax Partner at EY India states that taxpayers would gain advantages if the basic exemption limit increased to Rs. 5 lakhs and if the rebate limit under section 87A of the Income-tax Act, 1961 rose to Rs. 10 lakhs from the present Rs. 7 lakhs.

The new income tax structure has restricted tax saving possibilities thus requiring modifications to benefit taxpayers. While the NTR is preferred as a streamlined tax system, it can be made even more effective by incorporating the following key changes:

Simplification of income tax slabs and rates:

The basic exemption limit of income should rise from the current INR 3 lakhs to INR 5 lakhs.

The present tax slab ranges fluctuate between INR 2 lakhs and INR 3 lakhs. The current income tax system requires a uniform structure to maintain consistent income gaps.

The standard deduction represents a fixed deduction from your taxable income. The standard deduction in the new income tax system stands at Rs 75,000 which was increased from Rs 50,000 in the previous Budget by FM Nirmala Sitharaman. The previous income tax system maintains a standard deduction level of Rs 50,000.

Individual taxpayers have to meet the 31 July deadline for their income tax returns while dealing with delayed access to Form 16 which arrives by mid-June and Form 26AS which gets updated during June or July. The extension of the deadline to 8th September would allow taxpayers additional time to complete their returns properly which would minimize mistakes and eliminate the necessity for later revisions.