Middle class in Budget 2025: The Finance Bill presented by the FM on February 1, 2025, had a bonanza for middle-class taxpayers. However, despite the tax relief of not paying tax on incomes up to Rs 12 lakh, Budget 2025 disappointed middle-class taxpayers with no changes in these three areas.
GST changes in Budget 2025: The Central Board of Indirect Taxes and Customs (CBIC) has introduced key mechanisms to automate compliance under the GST framework in recent years. However, given the dynamic nature of business transactions in today's digital age, automating this ever-evolving tax law is a complex and demanding task.
TDS credit: March 31, 2025 is the deadline to file a revised TDS return for FY 2007-08 to 2018-19. What this means is if you have any pending TDS credit which was previously not claimed in ITR due to wrong TDS return filed by banks, etc then you need to tell the bank, etc to revise their TDS return. When the bank revised the TDS return, you will get the TDS credit.
No tax on ULIPs: If ULIPs and other policies are purchased from GIFT city International Financial Services Centre (IFSC) registered insurance intermediary office then then it is fully exempted from income tax provided the premium paid is not more than 10% of the actual sum assured. Indian residents however, do not get this benefit for purchasing ULIPs.
Save tax: Save more tax in old tax regime by claiming up to Rs 8.5 lakh tax deductions for a salary income up to Rs 25 lakh. Moreover, for salary income of Rs 15 lakh you need to claim atleast Rs 5,93,750 as tax deductions so as to achieve equilisation level of tax with new tax regime. If you claim more deductions beyond this equilisation point you will save more tax in old tax regime than new.
Income tax compliance for taxpayers: Budget 2025 has hiked the income tax basic exemption limit, introduced new income tax slabs under the new tax regime, no income tax on income up to Rs 12 lakh. The announcements made will help the taxpayers in easing their income tax compliance burdens. Know how these income tax proposals help taxpayers.
Salaried individuals can achieve zero tax on annual income up to ₹13.7 lakh through standard deductions and investments in NPS. Contributions to NPS provide significant tax savings, but uptake is low due to lock-in restrictions. Despite limited liquidity and mandatory annuitization at retirement, NPS offers long-term benefits and low fund management charges.
Budget 2025: Crypto transactions are now to be reported to the Income Tax Department through an method to be notified later. The G20 Leader’s New Delhi Declaration called for the swift implementation of the CARF. To enable this an amendment is being brought for the prescribed Reporting Entities to furnish information of crypto-asset.
Crypto announcements in Budget 2025: The Budget 2025 has proposed to tighten certain rules for crypto trading. As per the amendments made, income from VDAs will be part of the undisclosed income under the Search and Seizure. Further, the government has inserted new section under the Income Tax Act for mandatory reporting requirements.
Budget 2025: Income tax on cryptocurrency transaction. After Budget 2025 there is no change in taxation of cryptocurrencies as they continue to be taxed at 30% rate with applicable surcharge and cess. Moreover, 1% TDS on crypto transactions above Rs 10,000 for salaried and Rs 50,000 for business transactions will apply.
The budget has now clarified that Ulips with annual premiums over ₹2.5 lakh will be taxable as capital assets and the redemption proceeds will be treated as capital gains and taxed under Section 112A.
The deadline for filing updated tax returns has been extended from two to four years. This allows taxpayers more time to correct discrepancies in their income tax returns. However, delayed filings incur steep additional taxes of up to 70%. The updated returns cannot be used to claim missed tax benefits or adjust losses.
25% slab introduced for high earners and tax relief up to 30.8% for middle-income group. Read this table to see how much tax you can save at different income levels ranging from Rs 9 lakh to Rs 2.4 crore.
LTCG and STCG: Budget 2025 has made no change to the tax rate or holding period for long term capital gains (LTCG) and short term capital gains (STCG) for various assets like equities, bonds, debt mutual funds, unlisted shares, immovable property, etc. Read below to know more about tax rate and holding period of LTCG and STCG.
The lock-in periods of tax-saving instruments have forced a patient approach to investing. Tax relief will put more money in people’s pockets, but shifting away from tax-linked savings could affect long-term financial habits.
New vs old tax regime: If you are still confused about which tax regime to choose after Budget 2025 proposals, here is how to choose between the old, new and proposal newer income tax slabs.
Taxpayers will be able to claim nil valuation for two self-occupied properties instead of one. The reform will promote ownership for vacation homes or secondary residences as well.
Budget 2025: Increase in TDS threshold from Rs 2.4 lakh to Rs 6 lakh under section 194-I. Do note this is relevant for persons other than individuals and Hindu Undivided Family (HUF). If the rental amount is Rs 50,000 or more then you need to pay TDS on rent. Read below to know more.
Budget 2025: No Section 87A tax rebate on special rate incomes like short term capital gains, long term capital gains, and others, said Budget 2025. Experts say Section 87A tax rebate on special rate income is only available in the old tax regime and not in the new tax regime. Read below to know more about Section 87A tax rebate.
With a promise to further simplify the current tax law by introducing a new Income-tax Bill next week, the taxpayer-friendly Budget included key changes in personal taxation designed to simplify compliance, modernise tax administration, and stimulate economic growth. The government continues to incentivise the new tax regime, making no changes to the existing income tax slabs under the old tax regime for individual taxpayers.
Income tax relief in 2025: The finance minister has announced an increase in the tax rebate under Section 87A to Rs 60,000 from Rs 25,000 under new tax regime currently. The change in rates and slabs will benefit all such assessees who opt for the new tax regime in the upcoming fiscal year 2025-26.
Budget 2025: Now the Income Tax Department will not prosecute taxpayers who failed to deposit the collected TCS if the taxpayers pays the TCS amount before filing the TCS return. It is proposed to amend section 276BB of the Act to provide that the prosecution shall not be instituted against a person covered under the said section.
Budget 2025 extends the period for filing updated income tax returns from 24 months to 48 months. Taxpayers will now face higher penalties, with rates of 60% and 70% for returns filed in the third and fourth years, respectively.
Income Tax Calculator: Income Tax Calculation as Per New Tax Regime: Read this EY analysis on how much additional tax savings a salaried employee will have from proposed new income tax slabs under the new tax regime. It is assumed that he/she claims a standard deduction of Rs 75,000 under the new tax regime
Budget 2025: Customs tariff under first schedule to the customs tariff act, 1975 has been reduced to 20% on HSN code 7113 (jewellery and parts thereof). Experts say this will bost jewellery consumption in India. The customs tariff on Platinum Findings has been reduced to 5% from earlier 25%. Read below to know more.
The new tax regime allows a salaried individual to claim a standard deduction of Rs 75,000 from the salary income. There is no hike in the standard deduction limit in the Budget 2025.
Budget 2025: Now the Finance Minister has removed the aggregate threshold limit of Rs 10,000 for deducting TDS on Winnings from lottery or crossword puzzles and winnings from horse races and now it will apply in respect of a single transaction over Rs 10,000. Read below to know more about TDS on lottery, horse racing and crossword puzzle income.
The simplification of rules will help taxpayers easily file their income tax returns without any calculation as they can claim the value of any two houses as zero. The deemed calculation of house will apply only if the taxpayer has a third house.
Budget 2025: TDS threshold limit for dividend income is hiked to Rs 10,000 from Rs 5000 at present. This amendment was announced in Budget 2025 and is effective from April 1, 2025. Section 194 requires that the principal officer of an Indian company or a company which has made the prescribed arrangements for the declaration and payment of dividends
Finance Minister Nirmala Sitharaman announced that NPS Vatsalaya subscribers would receive the same tax benefits under Section 80CCD(1B) as regular NPS subscribers. NPS Vatsalya is a pension scheme for minor children aimed at developing early saving habits for retirement. The proposal is pending parliamentary approval.
Budget 2025: The Finance Minister has announced that now assessment for search cases will include virtual digital assests (VDA) which includes crypto, non-fungible tokens (NFT), and others. This assessment after an income tax search procedure can go back up to six assessment years. Moreover, the definition of virtual digital asset (VDA) has been extended in Budget 2025.
No hike has been announced in the Section 80C deduction limit in Budget 2025. Deduction under Section 80C of the Income Tax Act is available under the old tax regime only. For the upcoming fiscal year 2025-26, an eligible taxpayer will be able to claim the same maximum deduction of Rs.1.5 lakh under Section 80C.
TDS limit in Budget 2025: Tax deducted at Source (TDS) rate has been rationalised. The limit for TDS for senior citizens is being doubled from Rs 50,000 to Rs 1 lakh. TDS on rent is being increased to 6 lakh rupees
TCS Limit in Budget 2025: FM proposes to hike the TCS limit to Rs 10 lakh from Rs 7 lakh currently. The TCS is applicable to the outward foreign remittance made by students for education purposes, travel purposes, or investment in foreign countries. The new limit will help to avoid taxes and face a liquidity crunch.
Finance Minister Nirmala Sitharaman will introduce a new Income Tax Bill next week, modelled on the Direct Tax Code. The aim is to simplify tax compliance for taxpayers and make the Income Tax Act easier to understand, enhancing readability and removing duplication of laws.
Flaw in ITR portal 2.0: Experts say there exists many flaws, glitches, etc with the e-filing ITR portal. Although these issues might seem small but collectively these add up to a bigger grievance. For example: When a notice under section 143(1)(a) is sent through email, only the intimation is shown. The actual reason for the proposed adjustment is buried deep within the ITR portal.
As of January 2025, the number of MSMEs registered on the Udyam portal has reached 5,84,06,752. MSMEs play a pivotal role in economic growth and employment. Therefore, to further boost small and medium businesses in India, the government should consider rationalising certain income-tax provisions for MSMEs and professionals in Budget 2025.
No GST on penal charges: The government has clarified that no bank, NBFC, regulated entities (REs) can charge Goods and Services Tax (GST) on penal charges on loans. Penal charges are payments in the nature of liquidated damages for breach of contract and hence are not a consideration for tolerating an act or situation.
The Union Budget 2025-26 increased the income tax basic exemption limit to Rs 4 lakh under the new tax regime, benefiting all taxpayers. A hike in the income tax basic exemption limit means all taxpayers will pay lower taxes.
Income tax is a tax levied directly by the central government on the incomes earned by the individuals and other non-individual entities such as Hindu Undivided Family (HUF), partnership firm and so on during a financial year. These various sources of income include salary, pension, capital gains, sale of financial investments, interest income, other incomes and so on.
Unlike the Goods and Services Tax (GST) Council where the Union Finance Minister and State Finance Ministers decide the rates, the income tax rates are announced by the Finance Minister during the year’s Union Budget.
The rate at which your total income earned during the year will be taxed depends on the slab in which your income falls. Over and above the income tax, a cess and surcharge is levied. The cess is payable by all taxpayers. For those earning more than Rs 50 lakh a year, a surcharge is levied between 10 percent and 37 percent.
The total income earned by a taxpayer during a financial year has to be reported to the government in the assessment year by filing income tax return (ITR filing).
Financial year is the year in which income is earned by a taxpayer; a financial year is between April 1 and March 31. Assessment year is the year immediately following the financial year for which the return is to be filed.
Income earned from various sources such as salary, pension, interest from fixed deposits (FDs), savings account, capital gains from sale of house, equity mutual funds, debt mutual funds and so on have to be reported in ITR.
