The Centre has announced many changes in the income tax rules, to be effective from April 1, 2025. Among these changes, many were announced in the Union Budget presented in February this year. If you are a taxpayer, then the changes in the income tax rules will matter to you.
In Budget 2025, Finance Minister Nirmala Sitharaman announced several important changes to make the existing tax system simple and effective. These new tax rules will come into effect from April 1, impacting your investment and tax planning.
Tax rule changes: 10 major changes to be effective from April 1, 2025
- New Income Tax Slabs and Rates for FY 2025-26 (New Tax Regime)
0 to Rs 4 lakh – NIL
Rs 4 lakh to Rs 8 lakh – 5%
Rs 8,00,001 to Rs 12,00,000 – 10%
Rs 12,00,001 to Rs 16,00,000 – 15%
Rs 16,00,001 to Rs 20,00,000 – 20%
Rs 20,00,001 to Rs 24,00,000 – 25%
Above Rs 24,00,000 – 30%
(Note: No changes announced in the Old Tax Regime)
Also read: ‘WhatsApp chats helped unearth Rs 200 crore…’: Govt to introduce provisions to track digital footprint under new I-T Bill
- Increased exemption under section 87A
The Modi government in the recent budget hiked the rebate under 87A from Rs 25,000 to Rs 60,000. This rebate ensures that an income up to Rs 12 lakh has no income tax liability.
- Changes in TDS rules
From April 1, 2025, TDS limits have been increased in many sections, which will provide relief to small taxpayers. The TDS limit on interest income for senior citizens will increase to Rs 1 lakh.
- Changes in TCS rules
TCS rates have also been changed from April 1, 2025, which will affect foreign travel, investments and other transactions. Earlier, TCS had to be paid on sending an amount of more than Rs 7 lakh, but now this limit has been increased to Rs 10 lakh.
- Time limit for updated tax return (ITR-U) increased
Now the time limit for filing updated ITR has been increased from 12 months to 48 months (4 years). If the return is missed for any reason,
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