As the beginning of the financial year is on April 01, 2025, many income tax rules have come into effect. These updates will affect investors, salaried employees, and taxpayers.
Saloni Kumari | Apr 2, 2025 |
Check Revised Rates, Slabs, Deductions and More: New Income Tax Rules
As the beginning of the financial year is on April 01, 2025, many income tax rules have come into effect. These updates will affect investors, salaried employees, and taxpayers. The revised tax slabs, new deductions, and higher TDS limits have been introduced in the 2025 budget by the government. They also announced various tax exemptions to make filing and paying taxes easier and more convenient. Now that these changes are in effect, taxpayers must stay updated to avoid fines and follow all tax rules correctly.
The government has made changes to the income tax slabs as per the new tax regime for FY 2025-26. According to the new structure, those having an income up to Rs 4 lakhs are not required to pay any sort of tax. Those having an income between Rs 4,00,001 to Rs 8 are required to pay a tax of 8% on their income, and those having an income between Rs 8,00,001 to Rs 12 lakh are required to pay a tax of 10%.
The tax rate is 15% for individuals with an income between Rs. 12 lakh and Rs. 16 lakh and 20% for individuals with an income between Rs. 16 lakh and Rs. 20 lakh. If you earn between Rs. 20 lakh and Rs. 24 lakh, the tax rate is 25%, while those earning above Rs. 24 lakh will be taxed at 30%.
Individuals who have opted for the new tax regime are not required to pay any sort of tax on the income upto Rs. 12 Lakh. However, they are still required to file an Income Tax Return (ITR) to take benefit under Section 87A.
Salaried employees will receive a standard deduction of Rs. 75,000, which makes income up to Rs. 12.75 lakh tax-free. Additionally, a marginal relief provision ensures that individuals earning just above Rs. 12 lakh only pay tax on the extra amount beyond the limit.
An expert has said that, from April 1, the Finance Act 2025 is changing India’s tax system, making it easier and more beneficial for many people. With income up to Rs. 12 lakh now tax-free, middle-class families will have more money to save and spend, boosting the economy.
The new tax slabs and marginal relief ensure fair taxes for different income groups, while the higher standard deduction helps salaried employees by reducing paperwork and simplifying tax filing.
The government has increased TDS and TCS limits to make taxes easier and give relief. Senior citizens will now have a higher TDS limit on bank interest of Rs. 1 lakh (earlier, the limit was up upto Rs. 50,000). For other individuals, the limit has now increased to Rs. 50,000.
The TDS limit for dividend income is now Rs. 10,000, which is twice the previous set limit. Also, the TCS limit for sending money abroad has increased from Rs. 7 lakh to Rs. 10 lakh.
Calculating tax on self-occupied houses is now simpler. Taxpayers can declare up to two houses as having zero value, making tax filing easier.
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