Budget 2025 New Tax Regime Changes EPF Mandatory Plans: If sources are to be believed, there is a consideration to make EPF (Employees Provident Fund) mandatory for all slabs. The government’s focus is on promoting the New Tax Regime so that more and more people adopt it.
Budget 2025 New Tax Regime Changes: The budget of the year 2025 can be focused on the middle class. It can bring great relief especially for the employed and taxpayers. The central government can announce new tax exemptions to make the New Tax Regime more attractive. If sources are to be believed, then there is a consideration to make EPF (Employees Provident Fund) mandatory for all slabs. The focus of the government is on encouraging the New Tax Regime so that more and more people adopt it. Let us tell you, from the year 2023, the government had made the New Tax Regime the default.
EPF can be included
If sources are to be believed, in the upcoming budget, to make the new tax regime more attractive, there may be an announcement of giving exemption on Employee Provident Fund (EPF) to the employed. It can be made mandatory in the new tax regime. Till now, in the old tax regime, EPF is included in tax exemption under section 80C. It is also included as a deduction in Form 16 by the employer. A total tax exemption of up to Rs 1.5 lakh is included. According to experts, the inclusion of EPF in the new tax regime is likely to open the window of 80C. However, it is not yet confirmed on the basis of which section it will be included or whether it will be separately benefited as an additional tax exemption.
New Tax Regime – What changes can be made?
The New Tax Regime was introduced in Budget 2020, where it was introduced simpler and without many deductions compared to the old tax system. However, there has been a mixed response from taxpayers since the beginning. The government is now planning to make it more attractive. New exemptions are likely in Budget 2025 so that taxpayers get more disposable income along with savings.
What are the exemption provisions in the new tax system?
Some changes were made in the new tax regime in the year 2023. The basic exemption limit was increased from Rs 2.5 lakh to Rs 3 lakh. At the same time, the tax exemption limit with rebate has now increased from Rs 5 lakh to Rs 7 lakh. Tax rebate was increased for this structure. Apart from this, there is a tax exemption of Rs 50,000 as standard deduction. In such a situation, there is no tax on income up to Rs 7.5 lakh in the new tax regime.
Existing New Tax Regime slabs
| Income | Tax Rate |
|---|---|
| ₹0 to ₹3 Lakh | Zero (0%) |
| ₹3 lakh to ₹6 lakh | 5% |
| ₹6 lakh to ₹9 lakh | 10% |
| ₹9 lakh to ₹12 lakh | 15% |
| ₹12 lakh to ₹15 lakh | 20% |
| Above ₹15 lakh | 30% |
Note: This is the current tax slab, but some relaxation or changes are expected in Budget 2025.
EPF Mandatory- New facility for salaried people?
The government is considering making Employees Provident Fund (EPF) mandatory for all. This will make it mandatory for employed people to save a part of their salary every month as PF. Its purpose is to make the retirement planning of employees secure. EPF fulfills your financial needs after retirement. Investment in it is guaranteed and returns are secure. EPF also provides tax benefits from the government in the old tax system. If the government makes EPF mandatory in the new tax system as well, then it will be a big benefit for employed people.
What are the challenges in the New Tax Regime?
Tax exemption options like 80C, HRA, and 80D are not available in the New Tax Regime. The government can include exemptions like 80C in the New Tax Regime. Taxpayers focus on spending rather than saving. It can be made attractive by adding EPF and other safe investments. Currently, most taxpayers choose the old system. The government can make it popular by changing the tax slab and giving new exemptions.
