Big Announcements in Union Budget 2025: Tax Slab Changes and Senior Citizen Benefits Likely

New Delhi (The Uttam Hindu): Finance Minister Nirmala Sitharaman is set to present the Union Budget 2025 on February 1, 2025 and expectations are running high, particularly in the Income Tax sector. Taxpayers and the general public are hopeful for announcements that will reduce their tax burdens. Speculation points towards potential changes in tax slabs and new relief measures, with particular focus on enhancing the benefits for common citizens.

One of the key expectations is a revision of tax slabs along with higher deductions in the old tax regime. Experts suggest an increase in the deduction limit under Section 80TTA, which currently provides a Rs 10,000 deduction on interest earned from savings accounts. There is a push to raise this limit to Rs 20,000. Furthermore, the deduction limit under Section 80TTB for senior citizens which currently stands at Rs 50,000 is expected to rise to Rs 1 lakh offering more financial support to those relying on interest income from fixed deposits and savings.

Section 80TTA allows individuals and Hindu Undivided Families (HUFs) to deduct up to Rs 10,000 on interest from savings accounts but it does not apply to fixed or recurring deposits. On the other hand, Section 80TTB offers senior citizens deductions on interest income from savings, fixed and recurring deposits, with a current cap of Rs 50,000. In light of rising healthcare costs and the potential for a repo rate cut by the RBI there is significant demand for the increase of this limit to Rs 1 lakh. Additionally, experts suggest that deductions under Sections 80TTA and 80TTB be extended to the new tax regime to encourage more people to switch to it.