Budget 2025: FM should introduce new tax slab for individuals who adopt renewable energy, reduce carbon emissions

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Subscribe to enjoy similar stories. Finance minister Nirmala Sitharaman is set to present her second comprehensive budget after the 2024 general elections. The budget proposals are expected to focus on the ongoing theme of helping India transition to the envisioned "Viksit Bharat" of “Amrit Kaal." Hence, the focus will be on employment generation, skill development, and providing relief to a large mass of people distressed by inflation, with the overall objective of pushing up the GDP growth rate.

Let’s do some crystal ball gazing and share ideas on the direction that the Budget 2025 proposals may take from an individual tax perspective. Taxpayers, as always, expect the finance minister to provide lower tax rates and tax concessions to increase personal disposable income. More money in the hands of the people is a good idea from a macroeconomic perspective and would also mean increased savings, investments and expenses, which will help fuel economic growth.

Providing tax concessions to increase personal disposable income is seemingly a simple fix to meet popular demand and boost economic growth. The finance minister and her team working on the budget could consider the following suggestions: For the past five years, we have had two tax regimes running in parallel. The old tax regime with the regular income slabs and eligible deductions/exemptions and the new tax regime with relatively wider income slabs and lower tax rates, without most deductions/exemptions available in the old tax regime.