Budget 2025: Finance Minister Nirmala Sitharaman is going to present the budget on 1 February 2025. The Finance Minister can announce the Direct Tax Code 2025 in the General Budget 2025-26. This new law will replace the Income Tax Act of 1961. Tax experts believe that this code will make tax laws easier. Also, legal disputes will be reduced and the entire process will be easier for taxpayers than before.
Can the government abolish the old tax regime?
With DTC 2025, the government can gradually abolish the old tax regime. Currently, taxpayers have the option to choose between the old and new tax systems. But this option may end soon. According to government data, about 72% of taxpayers adopted the new tax regime in the financial year 2023-24. In such a situation, most experts believe that the government’s target is to focus on the new tax regime instead of the old tax regime. The old tax regime may be removed in the coming time.
Middle class can get benefit
Under the Direct Tax Code (DTC 2025), middle class taxpayers, especially those with annual income of Rs 5 lakh to 15 lakh, are likely to get relief.
The tax structure will be simplified and integrated.
The number of tax slabs may reduce.
The tax filing process will be made easier.
It will be easy to separate into categories
Under DTC 2025, resident and non-resident categories will be simplified. At present, categories like R-OR (Resident but Not Ordinarily Resident) and R-NOR can be removed.
Changes in tax cuts and exemptions
The government is planning to phase out tax exemptions and deductions. However, the tax rates have to be reduced and the methods of compliance have to be made easier. The middle class forms a large part of the taxpayers and many old tax provisions may change for them. This budget is the first full budget of the third term of the Modi government. In such a situation, there are a lot of expectations from the budget of Finance Minister Nirmala Sitharaman.
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