Union Budget 2025: What are the top expectations for salaried class and middle-income group?

The wait for budget is over, with the finance minister Nirmala Sitharaman set to present the Union Budget 2025-26 on Saturday. While the youth are hoping for job-creation initiatives, the salaried class is eagerly anticipating income tax relief.
Taxpayers and industry stakeholders are eagerly anticipating major announcements on tax slabs, fiscal consolidation, and sectoral incentives.
President Droupadi Murmu’s address to the joint session of Parliament on Friday highlighted the concerns of the middle class, fueling expectations of significant announcements in their favour.
The budget is expected to strike a balance between economic growth and fiscal discipline while addressing the needs of taxpayers, businesses, and key industries.
Tax slabs and relief measures
One of the most closely watched aspects of the Budget is potential tax relief for individuals and businesses. Expectations are high for revisions in the new tax regime, particularly an increase in exemption limits and standard deductions.
Reports suggest that the government may consider raising the basic exemption limit from Rs 3 lakh to Rs 10 lakh, as per news agency ANI.
There is growing speculation about a potential new 25% tax slab for individuals with annual incomes between Rs 15 lakh and Rs 20 lakh, as per reports.
At present, earnings above Rs 15 lakh are taxed at 30%. If implemented, the highest 30% tax rate would apply only to incomes exceeding Rs 20 lakh.
Taxpayers are also hopeful for an increase in the standard deduction, which stands at Rs 50,000 under the old tax regime and Rs 75,000 under the new one.
Tax reforms and simplification
A major focus of Budget 2025 is expected to be tax reform and simplification. The government is likely to introduce a modernized Direct Tax Code (DTC), replacing the 63-year-old Income Tax Act—much like how GST revolutionised indirect taxation.
Industry leaders have also urged for simplification of complex TDS/TCS provisions to reduce litigation and compliance burdens.
Sectoral demands and policy expectations
Real estate: The sector is advocating for tax rationalization, an increase in the home loan interest deduction limit under Section 24(b) from Rs 2 lakh to Rs 5 lakh, and relief in long-term capital gains (LTCG) tax to boost housing demand.
Healthcare: Industry players are pushing for increased healthcare spending to 2.5% of GDP, lower GST on health insurance premiums, incentives for digital health solutions, and reduced import duties on medical equipment to enhance accessibility and affordability.
Economic growth and industry outlook
With India’s economic momentum remaining strong, around 60% of businesses anticipate GDP growth in the range of 6.5%-7% for FY25. A key priority is strengthening collaboration between educational institutions and industries to ensure a job-ready workforce, particularly in IT, healthcare, and manufacturing.
As Finance Minister Nirmala Sitharaman prepares to present her record eighth consecutive Budget, all eyes will be on key announcements that shape India’s economic trajectory for the coming fiscal year.