Price range 2025 | Key highlights & Essential Tax Proposals


Union Finance Minister Smt Nirmala Sitharaman on February 1st 2025 introduced her eighth consecutive Union Price range 2025 within the Lok Sabha. Under are the most recent private finance associated proposals which were made in Price range 2025-26 ;

  • Beneath the brand new tax regime, the fundamental exemption restrict has been elevated from Rs 3 lakh to Rs 4 lakh.
  • As per the Price range 2025, no earnings tax will probably be payable on earnings as much as Rs 12 lakh has been proposed.
  • The salaried people eligible for the commonplace deduction advantage of Rs 75,000 won’t be required to pay any taxes if their gross taxable earnings doesn’t exceed Rs 12.75 lakh.
  • In case your earnings exceeds Rs 12 lakh then you have to pay tax at relevant slab charges.
  • The restrict for claiming the tax rebate is elevated from the present Rs 7 lakh to Rs 12 lakh for earnings beneath Part 115BAC. The utmost rebate will rise from Rs 25,000 to Rs 60,000.
  • Kindly notice that this rebate won’t apply to particular grade incomes resembling capital good points.
  • In case your regular earnings apart from particular price earnings (resembling capital good points) is as much as Rs 12 lakh, a tax rebate is being offered along with the profit as a consequence of slab price discount in such a way that there isn’t a tax payable by you.
  • In easier phrases, when you’re a daily salaried particular person or earn other forms of “regular earnings” as much as Rs 12 lakh, you gained’t must pay any tax, due to each the tax rebate and the lowered earnings tax slabs. Nonetheless, when you earn earnings from sources like capital good points, that earnings gained’t profit from the rebate, and it will likely be taxed individually beneath completely different guidelines.

The restrict for tax deduction at supply on curiosity earnings for senior residents is being doubled from the current Rs 50,000 to Rs 1 lakh.

The annual restrict of Rs 2.40 lakh for TDS on lease is elevated to Rs 6 lakh.

  • Price range 2025 has proposed to increase the time restrict for submitting up to date earnings tax returns from the present 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 earnings 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. 

Presently earnings 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.

The brink to gather tax at supply (TCS) on remittances beneath 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 training functions, the place such remittance is out of a mortgage taken from a specified monetary establishment.

Withdrawals from outdated NSS accounts (Nationwide Financial savings Scheme) will probably be completely tax-free if the funds are withdrawn on or after August 29, 2024. There will probably be no tax legal responsibility on withdrawals from these accounts.

It’s proposed to increase the tax advantages accessible to the Nationwide Pension Scheme (NPS) beneath 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.

  • The taxation of ULIPs (Unit Linked Insurance coverage Plans) has been rationalised to offer that each one ULIPs which aren’t exempt beneath part 10(10D) will probably 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, will even be taxable as capital achieve as a substitute of being taxed as earnings from different sources. The ULIPs which had been exempt beforehand will proceed to stay so.

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