Income Tax Changes From 1st April 2025: Top 10 New Income Tax Rules
The Budget 2025 introduced some major changes to the Income Tax Act 1961 to
simplify the tax structure in India. These changes will come into effect on
1st April 2025 and will be relevant from FY 2025-26 onwards.
70% of Taxpayers Miss Out on Tax Savings!
Plan Now & Save More.
Plan Your Taxes
Important Income Tax Changes 2025
Income Tax Slabs for FY 2025-26 (AY 2026-27)
The Budget 2025 proposed new tax slab rates under section 115BAC i.e., the
New Tax Regime or the Default Tax Regime. This was to ensure that
individuals save more and increase their spending capacity. These revised
tax slab rates will be applicable for income earned in FY 2025-26 onwards.
The new slab rates for FY 2025-26 are as follows:
Income Tax Slabs Income Tax Rates
Upto Rs.4 lakh NIL
Rs. 4 lakh - Rs.8 lakh 5%
Rs.8 lakh - Rs.12 lakh 10%
Rs.12 lakh - Rs.16 lakh 15%
Rs.16 lakh - Rs.20 lakh 20%
Rs.20 lakh - Rs.24 lakh 25%
Above Rs.24 lakh 30%
Note: Income Tax slab rates under the Old Tax Regime (Optional Regime)
remain the same.
Increased Rebate Under Section 87A
The rebate u/s 87A for taxpayers filing tax returns under the New Tax
Regime was increased to Rs. 60,000 from the previous limit of Rs. 25,000.
Now the taxpayer can enjoy a tax free income of up to Rs. 12 Lakhs.
This means taxpayers earning income up to Rs. 12 Lakhs will have no tax
liability under the new tax regime.
The rebate for taxpayers opting for the Old Tax Regime remains the same
i.e., Rs. 12,500.
Tax Deduction at Source (TDS) Changes
The provisions of TDS have significant changes that will be applicable from
April 2025. It was proposed to enhance threshold limits for various TDS
sections for both individuals and businesses. The threshold for TDS on
interest received by senior citizens was increased to Rs 1 lakh from the
previous limit of Rs. 50,000. Similarly, the thresholds for rent and
commissions were also increased. The enhanced threshold limits for various
TDS sections are given in the below table.
Effective from April 2025, the TDS threshold limits for various sections
were increased as follows:
Section Before 1st April 2025 From 1st
April 2025
193 - Interest on securities NIL
10,000
194A - Interest other than Interest on securities
(i) 50,000/- for senior citizens;
(ii) 40,000/- in case of others when the payer is the bank, cooperative
society and post office
(iii) 5,000/- in other cases (i) 1,00,000/-
for senior
citizen
(ii) 50,000/- in case of others
when the payer
is a bank, cooperative society
and post office
(iii)
10,000/- in other cases
194 – Dividend, for an
individual shareholder 5,000 10,000
194K - Income in respect
of units of a mutual fund 5,000 10,000
194B - Winnings from lottery,
crossword puzzle Etc.&
194BB - Winnings from
horse race Aggregate of amounts
exceeding 10,000/-
during the financial year 10,000/- in respect of a single transaction
194D - Insurance commission 15,000 20,000
194G - Income by way of
commission, prize etc.
on lottery tickets 15,000
20,000
194H - Commission or
brokerage 15,000
20,000
194-I - Rent 2,40,000 (in a financial year) 50,000 per
month
194J - Fee for professional
or technical services 30,000
50,000
194LA - Income by way
of enhanced compensation 2,50,000 5,00,000
194T - Remuneration, Interest
and Commission paid to partners NIL 20,000
Note: Provisions of other TDS related sections remain the same.
The following TCS changes will be effective from April 2025 for TCS:
Section Before 1st April 2025 From 1st
April 2025
206C(1G) –
Remittance under LRS
and overseas tour
program package 7 Lakhs
10 Lakhs
206C(1G) – Remittance
under LRS for education
if financed through
educational loans 7 Lakhs Nil (No TCS
Applicable)
206C(1H) – Purchase
of Goods 50 Lakhs Nil (No TCS
Applicable)
Note: Provisions of other TCS related sections remain the same.
Updated Tax Return: ITR-U
The deadline for filing an Updated Tax Return was extended from 12 months
to 48 months (4 years) from the end of the relevant assessment year. This
extension was to encourage the taxpayers to disclose any previously
undisclosed incomes and pay relevant taxes on the same.
The additional tax liability based on the timeline of filing an updated
return is as follows:
If ITR-U filed within Additional Tax
12 months from the end of the relevant AY 25% of additional tax (tax
+ interest)
24 months from the end of the relevant AY 50% of additional tax (tax
+ interest)
36 months from the end of the relevant AY 60% of additional tax (tax
+ interest)
48 months from the end of the relevant AY 70% of additional tax (tax
+ interest)
Benefits For IFSC
The sunset dates for the commencement of operations of IFSC units for tax
concessions have been extended to 31 March 2030.
The premium paid on a Life Insurance policy availed from an office in IFSC
by non-residents, is completely exempt under section 10(10D) without any
maximum premium amount.
Tax Exemption For Start-ups
Under Section 80-IAC, start-ups incorporated before 01.04.2030 will be
allowed a 100% deduction of profits and gains for three consecutive years
out of ten years from the year of incorporation subject to certain
conditions.
Omission Of Section 206AB and 206CCA
>From April 2025, both Sections 206AB and 206CCA of the Income Tax Act 1961
will be omitted to reduce the compliance burden on tax diductors/collectors.
Previously, diductors/collectors were required to determine the correct
withholding tax by identifying if the recipient has filed tax returns or
not. This was a burden as it led to delays in filing TDS and TCS return
statements, higher rates, blocking of capital, and compliance burden.
{KR Thus the erroneous tac deductions may be avoided is the intent; but
crooks may deduct higher tax also under the blindfold status projection}
Deduction On Remuneration Paid To Partners
The limit of deduction available to partnership firms and LLPs for
remuneration paid to partners is also enhanced. The calculation limits were
revised to make way for higher deductions during tax computation.
The following limits will be applicable to determine the maximum deduction
available for partners remuneration paid:
Book Profit Limit
On the first Rs.6,00,000 of book profit or loss Rs.3,00,000 or 90% of the
book profit, whichever is higher
On the remaining balance of book-profit 60% of the book-profit
Treatment Of ULIPs as Capital Gains
The proceeds from ULPIs whose premium exceeds 10% of the assured amount or
Rs. 2.5 Lakhs annually will be treated as capital gains and will be taxed
accordingly.
Relaxation Of Deemed Let-Out Property Provision
Previously, the annual value of up to two self-occupied properties was
deemed to be NIL, if the owner is unable to occupy the property due to
employment, business, or professional commitments at a different location.
It is now proposed that the annual value of up to two house properties
shall be NIL if the owner occupies the house for his own residence or
cannot occupy it for any reason.
The Finance Bill 2025, relaxed the condition to determine deemed let-out
property by allowing individuals to claim up to two house properties as
self-occupied and declare NIL income on such properties without any
conditions.
K RAJARAM IRS 1425
On Tue, 1 Apr 2025 at 07:32, Jambunathan Iyer <[email protected]> wrote:
> Wishing you all a Happy Finacial Year 2025-26
>
> Important money-related dates during the Finacial year 2025-26 with this
> handy financial calendar -
>
> In April 2025 Frame your goals, form tax strategy, set clear financial
> goals and review your budget. Update insurance policies as per your current
> needs and reassess your tax strategy.
>
> Submit Form 15G/15H If you’re eligible, submit these forms to prevent
> unnecessary TDS deductions on your interest income.
>
> Start tax planning Evaluate the new and old tax regimes to choose the one
> that maximizes savings based on your income and investments.
> Plan your investments, prepare your will Sit with your financial adviser
> to plan tax-friendly investments and ensure your financial goals are
> aligned. If you haven’t made a decision yet, now is a good time to do so.
>
> If travelling in summer or autumn, book tickets early for better deals.
> Start saving now if planning for winter or next year.
>
> Healthcare improvements include expanded medical education, Improved
> insurance coverage based on Last year spending (take the Highest Spend
> Period for as base and cancer care centers)
>
> If you're considering real estate, urban development projects and Jal
> Jeevan Mission could impact housing look for your plan vs earning.
>
> Keep an eye on the Union Budget 2025-26, which emphasizes balanced growth
> and development.
>
> Consider tax changes, including updates to income tax slabs and exemptions
> for startups.
>
> Plan investments wisely, especially with government initiatives like Make
> in India and infrastructure development, Post Office Saving, Improved PPF
> Contribution since EPF New slab is almost approved.
>
> If you're an entrepreneur, explore funding opportunities for MSMEs and
> startup incentives.
>
> Upskill with programs like National Centers of Excellence for Skilling and
> AI-focused education.
>
> Stay updated on economic trends and market shifts to make informed
> decisions.
>
> Plan you Taxpayment and ensure advance Tax as Planned on your Sale Growth.
>
> Expect and Plan additional Expenses based on National Growth and
> expectation of your Employees
>
> N Jambunathan Rengarajapuram-Kodambakkam-Chennai-Mob:9176159004
>
> *" What you get by achieving your goals is not as important as what you
> become by achieving your goals. If you want to live a happy life, tie it to
> a goal, not to people or things "*
>
>
--
You received this message because you are subscribed to the Google Groups
"Thatha_Patty" group.
To unsubscribe from this group and stop receiving emails from it, send an email
to [email protected].
To view this discussion visit
https://groups.google.com/d/msgid/thatha_patty/CAL5XZoqt7G40QtjaLhsyhFXexqDFeU-Gt7B%3DLuuk3nWKrYXkjA%40mail.gmail.com.
