The Union Budget 2025 is highly anticipated, especially regarding income tax reforms that could impact millions of taxpayers. As Finance Minister Nirmala Sitharaman prepares to present the budget, individuals and businesses alike are eager to see what changes will be introduced. This article explores the Budget 2025 expectations related to income tax, deductions, and reliefs. Stay tuned for Union Budget Live updates as they unfold.

1. Possible Changes in Income Tax Slabs

One of the biggest Budget 2025 expectations is a revision in the income tax slabs. Taxpayers are hoping for an increase in the basic exemption limit, which currently stands at ₹2.5 lakh under the old tax regime and ₹3 lakh under the new regime. Experts suggest that the government may increase these limits to provide relief, considering inflation and rising living costs.

Additionally, there is speculation that the 30% tax slab (currently applicable to incomes above ₹15 lakh in the new regime) could be revised, potentially lowering the burden on middle-class taxpayers.

2. Higher Standard Deduction for Salaried Individuals

The salaried class has been advocating for a higher standard deduction. At present, the standard deduction under the old regime is ₹50,000. There are expectations that this could be raised to ₹75,000 or even ₹1 lakh in Budget 2025. An increase in this deduction would provide much-needed relief to salaried employees and pensioners.

3. Enhancements in Section 80C and 80D Benefits

Under Section 80C, taxpayers can claim deductions up to ₹1.5 lakh on investments such as PPF, EPF, and life insurance premiums. However, this limit has remained unchanged for several years. Many experts believe the government might increase the limit to ₹2 lakh or higher.

Similarly, under Section 80D, taxpayers can currently claim deductions on health insurance premiums (up to ₹25,000 for individuals and ₹50,000 for senior citizens). With rising healthcare costs, there is an expectation that these limits will be enhanced.

4. Relief for Home Loan Borrowers

Many homebuyers are hoping for a higher tax deduction on home loan interest. Currently, Section 24(b) allows for a deduction of up to ₹2 lakh on home loan interest payments. With increasing real estate prices and higher interest rates, the government may consider raising this limit to ₹3 lakh or more.

Additionally, first-time homebuyers under Section 80EEA can claim an additional deduction of ₹1.5 lakh, but this benefit was discontinued in previous budgets. There is speculation that it might be reintroduced.

5. Incentives for Startups and Businesses

Startups and MSMEs are crucial for economic growth, and they are expecting significant tax relief in Union Budget Live announcements. Some of the expected measures include:

• Extension of the tax holiday for startups beyond March 2024.
• Reduction in corporate tax rates for MSMEs.
• Incentives for investment in research and development.

Additionally, businesses are hoping for simplification in GST compliance and ease of filing returns.

6. Expansion of New Tax Regime Benefits

The new tax regime, introduced in 2020, offers lower tax rates but removes most deductions. However, many taxpayers still prefer the old regime due to its benefits. To make the new tax regime more attractive, the government may introduce:

• Additional deductions for investments and savings.
• An increase in the basic exemption limit.
• More tax reliefs for senior citizens.

If these changes are made, more taxpayers may opt for the new regime.

7. Possible Wealth Tax or Super-Rich Tax

There has been ongoing debate about imposing a wealth tax or increasing the surcharge on high-income individuals. Currently, those earning above ₹5 crore pay a 37% surcharge. There is speculation that a new slab might be introduced for ultra-high-net-worth individuals.

On the other hand, some experts argue that lowering the surcharge would encourage investment and economic growth.

8. Social Welfare and Tax Relief for Senior Citizens

Senior citizens have been demanding additional tax benefits, such as:

• Higher exemption limits for pension and fixed deposit interest.
• Reduction in TDS on senior citizen savings.
• Additional deductions on medical expenses.

These changes could significantly improve the financial well-being of retirees.

Conclusion

The Income Tax Budget 2025 Expectations Live discussions highlight the anticipation surrounding tax relief, deductions, and policy changes. As the government aims to balance economic growth with fiscal responsibility, taxpayers are hopeful for reforms that provide relief while boosting investments.

Stay tuned for Union Budget Live updates as the Finance Minister unveils the final proposals on February 1, 2025.

In today’s digital age, having a current account is essential for managing finances efficiently. One of the key features that many current accounts offer is an overdraft facility. But what exactly is an overdraft, and how does it work? In this article, we will explore the ins and outs of overdraft facilities in current accounts.

What is an Overdraft Facility?

An overdraft facility is essentially a short-term borrowing option that is linked to your current account. It allows you to spend more money than you have in your account, up to a certain pre-agreed limit. In simple terms, it’s like a safety net that kicks in when you run out of funds in your account.

How Does an Overdraft Work?

Let’s say you have a current account with an overdraft limit of $500. If you have $100 in your account and make a purchase for $200, the overdraft facility will cover the $100 difference. Keep in mind that using an overdraft is essentially borrowing money, so you will have to pay it back, along with any applicable fees or interest.

Benefits of an Overdraft Facility

• Financial Flexibility: An overdraft facility provides you with added flexibility in managing your finances, especially during unexpected expenses or emergencies.
• Avoiding Fees: In some cases, using an overdraft facility may be more cost-effective than incurring fees for bounced payments or failed transactions.
• Convenience: Having an overdraft facility means you don’t have to worry about your account balance constantly. It gives you a buffer to cover shortfalls in your account.

Drawbacks of an Overdraft Facility

• Fees and Charges: Overdrafts often come with fees and interest rates, which can add up quickly if not managed properly.
• Debt Trap: Relying too heavily on an overdraft facility can lead to a cycle of debt, especially if you struggle to repay the borrowed amount.
• Credit Score Impact: Using an overdraft facility frequently or exceeding the limit can negatively impact your credit score.

How to Apply for an Overdraft Facility

Most banks and financial institutions offer overdraft facilities as part of their current account packages. You can typically apply for an overdraft when opening a new account or request to add it to an existing account. The bank will assess your creditworthiness and make a decision on the overdraft limit based on your financial history.

Managing Your Overdraft Facility

To make the most of your overdraft facility while minimizing costs and risks, consider the following tips:

• Monitor Your Account: Keep track of your account balance regularly to avoid exceeding the overdraft limit.
• Repay Promptly: Make timely repayments to avoid accumulating interest and charges.
• Explore Alternatives: If you find yourself relying on your overdraft frequently, consider other financial solutions or budgeting strategies.

In Conclusion

Understanding overdraft facilities in current accounts is crucial for making informed financial decisions. While an overdraft can be a useful tool for managing short-term cash flow, it’s essential to use it responsibly and be aware of the associated costs. By staying informed and proactive, you can leverage your overdraft facility effectively and avoid falling into financial pitfalls.

Traditional banking has undergone a significant transformation in the digital age, with online-only banks emerging as a popular alternative. These banks operate exclusively online, allowing customers to manage their finances through mobile apps and websites. 

If you are considering opening an account with an online-only bank in India, it’s crucial to understand the pros and cons before making the final decision.

Pros:

Convenient account access:

One of the most significant advantages of online-only banks is their convenience. With 24/7 availability, you can access your account anytime and anywhere using your smartphone or computer. 

This means no more rushing to the bank before closing or waiting in long queues. Managing your finances becomes hassle-free, allowing you to focus on other important aspects of your life.

Lower fees and charges:

Banks that operate solely online usually have lower expenses compared to traditional banks, and they offer their customers these cost savings. Opening an account with an online-only bank usually means lower or no monthly maintenance fees, minimum balance requirements, and transaction charges. 

Attractive interest rates:

Many online-only banks offer competitive interest rates on savings accounts, often higher than traditional banks. By choosing an online-only bank, you can earn more from your savings, helping you achieve your financial goals faster. 

It is advisable to utilize a savings account calculator to compare interest rates and select the most suitable option for your requirements before opening an account.

Robust security measures:

Online-only banks prioritize the security of their customers’ accounts. They implement advanced encryption technologies and multi-factor authentication to protect your sensitive information. 

Additionally, they often provide real-time transaction alerts and allow you to set up personalized security preferences, adding an extra layer of protection. While no system is foolproof, online-only banks invest in maintaining a secure banking environment.

Cons:

Limited physical presence:

Unlike traditional banks, online-only banks lack physical branches. While this is an advantage in terms of convenience, it may pose a limitation for individuals who prefer in-person interactions for certain banking activities. 

An online-only bank may not be the best fit if you frequently require face-to-face assistance, such as depositing cash or seeking personalized advice.

Dependence on technology:

Operating exclusively online means relying heavily on technology for banking transactions. While online-only banks strive to provide a smooth user experience, occasional technical glitches or system downtime can occur. 

If you encounter any issues, you may have to rely on customer support or online resources. It’s important to consider your comfort level with technology and assess how it may impact your banking experience.

Limited range of products:

Online-only banks may have a narrower range of banking products and services compared to traditional banks. They often focus on core offerings such as savings accounts, checking accounts, and loans. 

If you require specialized financial products or services, such as a mortgage or a safety deposit box, you may need to explore options with traditional banks or other financial institutions.

To wrap up

Opening an account with an online-only bank in India has its own advantages and disadvantages. If the benefits align with your requirements and you are comfortable with online banking, an online-only bank can provide a seamless and cost-effective banking experience.

A small-cap fund is an investment option of the equity category that invests in small-cap companies. As per SEBI (Securities & Exchange Board of India), businesses ranking 251 and beyond of market capitalisation are called small-cap companies. Such mutual fund investment provides a high growth potential over the long-term period. Their growth pace accelerates during favourable market conditions and during rough conditions, they demonstrate high volatility. 

Why does a small-cap fund offer high growth?

As small-cap mutual fund spends on agile, promising, and smaller companies with high growth capacity, the potential of earning higher returns is even more. Small-cap companies basically show a rising economy. They can be small startups with attractive market runs owing to new services, ideas, and technology. 

Additionally, small-cap companies provide considerable rewards owing to the growth in the prices of the shares over the long term. As many small-cap companies begin their stock market phase with low market share prices, they offer tremendous growth potential of overcoming their bigger equity category i.e., large-cap and mid-cap. Thus, despite their lesser market experience and smaller size, small-cap companies, occupy a vital place in the nation’s economy and may become the industry leader in the future. 

Why do small-cap mutual funds have a higher risk?

Small-cap companies are inexperienced and might not endure the pressure of the market over the long term. Big-scale businesses often swallow the smaller rivals to maintain the leading market position. As an outcome, smaller companies may be acquired by bigger ones even before their maturity. Moreover, small companies may be prone to distinct market fluctuations, triggered by changes in governmental policies, both international and domestic. Hence, such market vulnerabilities can put small-cap funds at high risk.

Who can invest in small-cap funds?

Small-cap funds are prudent for those who can face potential losses from investments in the stock market and can explore small-cap mutual funds. You as an investor can even explore small-cap funds to avail long-term growth as smaller companies usually take more time to mature. 

There are many Indian businesses that began young and went on to grow into big entities. So, it can be rewarding over the long-term period. While mutual fund managers make it a point to consider the risk attached to small-cap companies before investing your money in them, you also as a retail investor must conduct your little research on the ground level to opt for the small-cap funds investing in apt companies of your preference. 

For example, sound monetary management and the strength of a company are vital for sustenance in the market. Often small-cap companies have limited fund reserves and hence a pragmatic liquidity reserve is essential. Apart from this, you as a retail investor must even look at the fund’s operating margin, sales, quality management and profits.

Note that once you have zeroed in on a preferred small-cap fund, you must use an online SIP calculator to determine the monthly contribution you can make to attain your financial goal by the deadline.

When it comes to managing your money, opening a savings account with a bank is a great option. Savings accounts provide a safe and secure way to store your money and earn interest on your deposits. However, with so many different types of banks, it can be overwhelming to determine which one is right for you. 

Here are the different types of banks you can open a savings account with:

Online banks

Online banks, also known as digital or virtual banks, are financial institutions that operate entirely online. These banks offer financial services such as savings accounts, loans, credit cards, and investment accounts, available through their website or mobile app. 

Online banks can be a good option for people who are prioritising convenience and flexibility in their banking experience. If you are comfortable with online banking technology and do not require in-person support, an online bank may offer the services and features you need to manage your finances effectively.

Public sector banks

Public sector banks are owned and operated by the Government of India. These banks are among the largest and most established in the country, with a wide network of branches and ATMs. Public sector banks often offer a range of financial services, including savings accounts, loans, and credit cards.

One advantage of opening a savings account with a public sector bank is the security and stability that comes with government ownership. These banks often offer competitive interest rates and may have lower fees than others.

Private sector banks

Private sector banks are owned and operated by private companies. These banks are often more customer-focused and may offer more personalised financial solutions. Private sector banks often offer various financial services, including savings accounts, investment accounts, and credit cards.

One advantage of opening a savings account with a private sector bank is the personalised attention and tailored financial solutions designed to meet your needs. Private sector banks may also offer higher interest rates and better customer service than public sector banks but at the same time they may also charge higher fees. 

Regional rural banks

Regional rural banks are financial institutions set up specifically to cater to the banking needs of rural areas. Regional rural banks are typically a partnership between a public sector bank and a local sponsor. These banks often offer a range of financial services, including savings accounts, loans, and insurance.

One benefit of opening a savings account with a regional rural bank is the accessibility and convenience of having a branch in your local community. These banks often offer specialised financial solutions tailored to rural areas’ needs, such as agriculture loans and crop insurance.

Foreign banks

Foreign banks are banks that are headquartered outside of India but have a presence in the country. These banks often have a global perspective and may offer more diverse financial products and services. Foreign banks often offer various financial services, including savings, investment, and foreign currency accounts.

One advantage of having an account with a foreign bank is that they might have a wider global network that may come in handy when you are travelling overseas. These banks may also offer specialised financial solutions that are unavailable with other types of banks.

Conclusion

There are many different types of banks to consider for opening a savings account, each with its own unique features, advantages, and disadvantages. Researching and comparing different banks before opening a savings account is important to ensure you choose a bank that meets your needs.

We can see that there are more automobiles on the roadways every day. Due to the rise in traffic accidents caused by this, securing your vehicle is more important than ever. Even if you are confident in your driving abilities, accidents are unpredictable, and the damage they cause would necessitate expensive repairs that would come out of your own wallet. You no longer need to do that, though, as there are plans available for bike insurance online that provide complete financial security.

Numerous policy types to look out for:

Depending on your needs, you can select a third-party or comprehensive policy when buying or renewing a two-wheeler insurance policy:

1) Liability to third parties

This policy covers damages to the person or property of a third party. According to the Motor Vehicles Act of 1988, a bike must have third-party insurance. The Supreme Court recently ruled that you must get a five-year third-party liability protection when you buy a new bike.

2) A thorough policy

A comprehensive plan, as opposed to third-party insurance, enables you to claim your own damages and third-party liabilities. Additionally, it offers protection from both – natural and man-made disasters, including theft, floods, vandalism, cyclones, earthquakes, etc. If your vehicle is stolen, you will be compensated according to its insured stated value (IDV). You have the option to alter the plan to meet your needs by choosing add-on covers. *

Advantages of purchasing bike insurance online

1) Abundant resources

The insurance provider will give you coverage if your car sustains any damages due to accidents, theft, or even man-made disasters. Accidental damage is also covered. Because you can never be sure when you may need the coverage and extra financial protection, you must always maintain insurance.

2) Coverage for personal injury

The standard third-party coverage won’t cover your car’s damages. To be covered for vehicle repairs, you must get a comprehensive policy. If it is insufficient, you can always supplement the standard coverage with add-on covers like Zero Depreciation, Consumables Expense, 24-Hour Roadside Assistance, etc. Then you can claim bike insurance when you need it, to bail yourself out of any trouble.

3) Adhering to the law

When riding a bike, carrying your insurance documents is just as crucial as donning a helmet and having your licence with you. You will be in trouble with the law and risk severe fines or even jail time if you are found riding a bike without insurance or with one that is expired or invalid.

4) Protection from third-party liability

You are obligated to compensate for any harm you cause a third party. Without insurance, you would be responsible for covering the costs of the damages. If such a cost arises unexpectedly, some people might be unable to cover it. All of this is covered by third-party insurance. However, you must be familiar with the procedure before you submit an insurance claim. Now, you can access it online on the website of the insurance company.

5) No-Claim Bonus (NCB)

Most consumers shy away from getting bike insurance coverage because they believe that the rates will be high. However, you are not required to pay the entire cost each time you renew your insurance. You qualify for a concession on your premium amount in the form of a No-Claim Bonus if you do not file any claims during the term period (NCB). You can expect to obtain a maximum concession of 50%. *

Compare several policies online, then see which insurance provider offers you the best discounts to ensure you get the most out of your bike insurance coverage. If you want bike insurance, check online, and you may acquire quotations in just a few clicks by using an internet application of a two-wheeler insurance premium calculator.

* Standard T&C Apply

‘Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.‘

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