EY India Urges Budget to Cut Tax Rates and Raise Personal Income Tax to Rs 5 Lakh

The upcoming union budget 2025-26 should focus on giving personal tax relief to common taxpayers by raising the basic exemption limit in the new tax regime from Rs 3 lakhs to Rs 5 lakhs and reducing tax rates, suggests global consulting and professional services firm Ernst & Young India (EY India).

- TBG NETWORK

EY India also asks for deferring tax deduction at source (TDS) on PF interest rate (above 2.5 lakhs) until the withdrawal stage to reduce compliance burden. In the previous budget, TDS rate rationalization was undertaken to a certain extent. To further simplify the entire gamut of withholding tax provisions, the TDS rate structure could be divided into 3-4 broad categories with lower rates and a negative list. Sameer Gupta, National Tax Leader, EY India, said "While a full comprehensive review of the direct tax code may take time, we might see some initial steps toward its implementation in this Budget.