Government’s Efforts to Provide Relief on Inflation and Taxes: Dr. Kunawat

Udaipur | Senior Chartered Accountant from the city, Dr. Nirmal Kunawat, today described the Union Budget presented by Finance Minister Nirmala Sitharaman in the Lok Sabha as historic. 

He stated that the budget focuses on youth and women, while also offering significant relief to the poor, middle class, and farmers. This year’s budget aims to ease the burden of inflation and taxes on the public. The government has announced an increase in the limit for the Kisan Credit Card from 3 lakh to 5 lakh rupees, providing relief. Additionally, the limit for investment and turnover classification for all MSMEs has been raised by 2.5 and 2 times, respectively, which will help them grow and inspire confidence to generate employment opportunities for youth. Previously, the limit was 10 crore rupees, but it has now been raised to 20 crore rupees.

In the budget, tax relief was given to salaried taxpayers, as those earning up to 12 lakh rupees annually will no longer have to pay income tax. There is also relief in TDS, and senior citizens have received significant tax relief. However, this benefit will apply only to those taxpayers who file their ITR under the new tax regime. The tax deduction limit for senior citizens has been increased from 50,000 to 1 lakh rupees. To encourage voluntary compliance, the deadline for filing updated returns has been extended from 2 years to 4 years.

Contrary to expectations, the budget only provided relief to salaried individuals, with no tax relief announced for businesses or industries. Taxpayers with an annual income of up to 18 lakh rupees will save 70,000 rupees, while those earning up to 25 lakh rupees will save 1.10 lakh rupees. However, no announcements were made regarding the old tax regime. This means that taxpayers who prefer to file their income tax returns under the old regime are left disappointed, as there were no changes, such as increasing the limits for deductions under Section 80C or 80D, which many were expecting.

The Finance Minister has offered exemptions under the new income tax regime. The standard deduction was also increased in the previous budget. This raises the question of whether the government intends to phase out the old tax regime. If this happens, it could affect many saving schemes, and people may avoid investing in them. Contrary to expectations, relief was only offered to salaried individuals, and no tax relief was provided for businesses or industries.

In the previous budget, the increase in STT and LTCG affected investors. Share market investors had hoped for tax relief in the 2025 Union Budget to boost market sentiment, but there were no changes to capital gains tax.

However, significant changes in the tax regime are expected. The Finance Minister has announced that a new tax bill will be introduced in Parliament next week.