1. Zero Income Tax till Rs. 12 lakh Income Under New Tax Regime
In the New Tax Regime, zero tax on income up to Rs. 12 lakhs, and if you are a salaried employee, you benefit even more with an uplift to Rs. 12.75 lakhs due to a standard deduction of Rs. 75,000.
New Tax Slab Rates-
| Total Income |
Rate Of tax |
| Up to Rs. 4,00,000 |
Nil |
| From Rs. 4,00,001 to Rs. 8,00,000 |
5% |
| From Rs. 8,00,001 to Rs. 12,00,000 |
10% |
| From Rs. 12,00,001 to Rs. 16,00,000 |
15% |
| From Rs. 16,00,001 to Rs. 20,00,000 |
20% |
| From Rs. 20,00,001 to Rs. 24,00,000 |
25% |
| Above Rs. 24,00,000 |
30% |
2. Key Update on 87A Rebate for Special Rate Income
- A new proviso has been added
- It is explicitly stated that the 87A rebate applies only to income taxed at normal rates not on special rate income such as short- term capital gains and long-term capital gains.
- The Bombay High Court ruling on this matter has now been effectively overruled.
3. Additional Tax Payment percentage of ITR -U (Updated return)
Extended Time Frame for Filing ITR-U:
· Previous Limit: Taxpayers had up to 24 months from the end of the relevant assessment year to file an updated return.
· Revised Limit: This period has now been extended to 48 months, providing taxpayers with a longer window to rectify omissions or errors in their original returns.
| Filed within 12 months |
Additional Tax of 25% |
| Filed within 24 months |
Additional Tax of 50% |
| Filed within 36 months |
Additional Tax of 60% |
| Filed within 48 months |
Additional Tax of 70% |
4. New Classification Criteria for MSMEs
| |
TURNOVER |
INVESTMENT |
| Micro Enterprises |
10 crore |
2.5 crore |
| Small Enterprises |
100 crore |
25 crore |
| Medium Enterprises |
500 crore |
125 crore |
5 . for Startups
The benefit under Section 80-IAC for Startups will be extended for another five years. This extension will make the benefits available to eligible Startups incorporated before April 1, 2030, encouraging more innovation and entrepreneurship.
6. Registration Relaxation for Small Charitable Trusts
The registration period for small charitable trusts and institutions is being increased from 5 years to 10 years, reducing their compliance burden.
7. TCS on sale of Specified Goods has been removed – for Ease of Business
The Union Budget 2025-25 proposes to omit TCS (Tax Collected at Source) on the sale of specified goods under section 206C(1H) to reduce compliance burden. Currently seller must collect 0.1% TCS on sales exceeding Rs. 50 lakh ,while buyer deduct TDS under section 194Q on the same transaction, leading to dual taxation.
To simplify tax compliance, TCS Will no longer apply from APRIL 1,2025, ensuring smoother transaction and reducing seller difficulties in verifying buyer compliance.
8. Taxation Benefits for Self- Occupied Properties
Tax payers to be allowed to claim the annual value of 2 self-occupied properties (previously 1) without any conditions (previously conditions attached).
9. Reduction in TDS/TCS Rates
| SECTION |
DESCRIPTION |
PRESENT TDS/TCS RATE |
PROPOSEDTDS/TCS RATE |
| 194LBC |
Income from securitization trust |
25% (if payee is Individual/HUF) 30% (otherwise) |
10% |
| 206C(1) |
TCS on timber/forest produce |
2.5% |
2% |
| 206C(1G) |
TCS on remittance under LRS for education financed by loan |
0.5% (after Rs. 7 lakh) |
Nil |
10. Increase in TDS/TCS Thresholds
| SECTION |
DESCRIPTION |
PRESENT THRESHOLD |
PROPOSED THRESHOLD |
| 193 |
Interest on securities |
Nil |
Rs.10,000 |
| 194A |
Interest other than on securities |
Rs.50,000 (for senior citizens), Rs.40,000 (others) for bank/post office; Rs.5,000 (other cases) |
Rs.1,00,000 (Senior citizens), Rs.50,000 (others for bank/post office); Rs.10,000 (other cases) |
| 194 |
Divident for individual shareholders |
Rs.5,000 |
Rs.10,000 |
| 194K |
Income for mutual funds/ specified companies |
Rs.5,000 |
Rs.10,000 |
| 194B |
Winnings from lottery, crossword puzzles, etc |
Aggregate over Rs. 10,000 in a financial year |
Rs. 10,000 for single transactions
|
| 194D |
Insurance commission |
Rs. 15,000 |
Rs. 20,000 |
| 194G |
Income from lottery ticket commission, etc. |
Rs. 15,000 |
Rs. 20,000 |
| 194H |
Commission or brokerage |
Rs. 15,000 |
Rs. 20,000
|
| 194I |
Rent |
Rs. 2,40,000 (annually) |
Rs. 600000 (annually) |
| 194J |
Fee for professional/technical services |
Rs. 30,000
|
Rs. 50000 |
| 194LA |
Income from enhanced compensation |
Rs. 250000 |
Rs. 500000 |
| 206C(1G) |
Remittance under LRS, overseas tour program package |
Rs. 700000 |
Rs. 1000000 |
