Union Finance Minister Smt Nirmala Sitharaman on February 1st 2025 introduced her eighth consecutive Union Price range 2025 within the Lok Sabha. Beneath are the newest private finance associated proposals which have been made in Price range 2025-26 ;
1) Revised Revenue Tax Slab Charges for FY 2025-26
- Underneath the brand new tax regime, the essential exemption restrict has been elevated from Rs 3 lakh to Rs 4 lakh.
- As per the Price range 2025, no revenue tax might be payable on revenue as much as Rs 12 lakh has been proposed.
- The salaried people eligible for the customary deduction good thing about Rs 75,000 is not going to be required to pay any taxes if their gross taxable revenue doesn’t exceed Rs 12.75 lakh.
- In case your revenue exceeds Rs 12 lakh then you should pay tax at relevant slab charges.
Associated article : 90% of Tax payers will now have Zero Tax Legal responsibility? (Price range 2025)
2) Revised Part 87A Tax Rebate FY 2025-26 / AY 2026-27
- The restrict for claiming the tax rebate is elevated from the prevailing Rs 7 lakh to Rs 12 lakh for revenue underneath Part 115BAC. The utmost rebate will rise from Rs 25,000 to Rs 60,000.
- Kindly word that this rebate is not going to apply to particular grade incomes reminiscent of capital good points.
- In case your regular revenue apart from particular fee revenue (reminiscent of capital good points) is as much as Rs 12 lakh, a tax rebate is being offered along with the profit attributable to slab fee discount in such a fashion that there is no such thing as a tax payable by you.
- In less complicated phrases, for those who’re a daily salaried particular person or earn different kinds of “regular revenue” as much as Rs 12 lakh, you received’t need to pay any tax, because of each the tax rebate and the lowered revenue tax slabs. Nevertheless, for those who earn revenue from sources like capital good points, that revenue received’t profit from the rebate, and it is going to be taxed individually underneath totally different guidelines.
Regular Revenue or common revenue refers to your wage, wages, rental revenue or enterprise income. The place as Particular Price revenue refers to capital good points, the place relevant tax charges are totally different. So, LTCG & STCG from Fairness or different particular charges belongings usually are not tax free inside this Rs 12 lakh.
Associated article : What’s the distinction between Regular Revenue and Particular Price Revenue?
3) Revised TDS restrict for Senior Residents
The restrict for tax deduction at supply on curiosity revenue for senior residents is being doubled from the current Rs 50,000 to Rs 1 lakh.
4) Revised TDS restrict on Lease
The annual restrict of Rs 2.40 lakh for TDS on lease is elevated to Rs 6 lakh.
5) Revised time restrict to replace ITRs
- Price range 2025 has proposed to increase the time restrict for submitting up to date revenue tax returns from the prevailing 24 months to 48 months.
- Whereas Price range 2025 has prolonged the time restrict for submitting up to date ITR, the penal tax payable on the extra revenue declared within the ITR has been pegged at 60% and 70% for up to date ITRs filed within the third and 4th yr from the top of the respective evaluation yr.
6) Good thing about two Self-Occupied Properties
Presently revenue tax assessees ca declare the annual worth of self-occupied properties as nil solely on the fulfilment of sure situations. Contemplating the difficulties confronted by taxpayers, it’s proposed to permit the good thing about two such self-occupied properties with none situation.
7) TCS adjustments for remittances underneath LRS
The brink to gather tax at supply (TCS) on remittances underneath RBI’s Liberalized Remittance Scheme (LRS) is proposed to be elevated from Rs 7 lakh to Rs 10 lakh. The FM additionally proposed to take away TCS on remittances for schooling functions, the place such remittance is out of a mortgage taken from a specified monetary establishment.
8) Tax free withdrawals from NSS
Withdrawals from previous NSS accounts (Nationwide Financial savings Scheme) might be solely tax-free if the funds are withdrawn on or after August 29, 2024. There might be no tax legal responsibility on withdrawals from these accounts.
9) NPS Vatsalya Account
It’s proposed to increase the tax advantages obtainable to the Nationwide Pension Scheme (NPS) underneath Part 80CCD of the Act to the contributions made to the NPS Vatsalya accounts as properly. No extra profit is relevant for deposits in NPS vatsalya account.
10) Taxation on ULIPs
- The taxation of ULIPs (Unit Linked Insurance coverage Plans) has been rationalised to supply that each one ULIPs which aren’t exempt underneath part 10(10D) might be taxable as capital good points much like fairness oriented funds. At present solely these ULIPs that are bought after 01 Feb 2021 with premium/ aggregage premiums greater than INR 2.5 lakhs p.a. are taxable as capital good points.
- Submit the modification, a ULIP bought say in 2005 for which the premium payable in any yr exceeds 10% of the particular sum assured, may also be taxable as capital acquire as an alternative of being taxed as revenue from different sources. The ULIPs which had been exempt beforehand will proceed to stay so.
Kindly word that this text might be up to date/edited as and when extra data is out there.
(Submit first printed on : 01-February-2025)
