Recent Tax Updates for 2025...!!!
These updates are part of the government's efforts to simplify the tax system, boost consumption, and drive economic growth.
Income Tax Slabs and Rates
Finance Minister Nirmala Sitharaman has introduced significant changes to the income tax slabs under the new tax regime. Key highlights include:
- No income tax for individuals earning up to Rs 12 lakh annually.
- For incomes between Rs 12 lakh and Rs 16 lakh, the tax rate is 15%.
- For incomes between Rs 16 lakh and Rs 20 lakh, the tax rate is 20%.
- For incomes between Rs 20 lakh and Rs 24 lakh, the tax rate is 25%.
- For incomes above Rs 24 lakh, the tax rate is 30%.
Rebate under Section 87A
The rebate under Section 87A has been increased from Rs 25,000 to Rs 60,000 under the new tax regime. This means that individuals with taxable income up to Rs 12 lakh will not have to pay any tax.
Standard Deduction
The standard deduction has been increased from Rs 50,000 to Rs 75,000 under the new tax regime, providing additional relief to salaried individuals.
Capital Gains Tax
The short-term capital gains tax rate has been increased from 15% to 20%, while the long-term capital gains tax rate has been set at 12.5%. The threshold for exemption on long-term capital gains has been increased from Rs 1 lakh to Rs 1.25 lakh.
Foreign Direct Investment (FDI)
The limit for Foreign Direct Investment (FDI) in the insurance sector has been increased to 100% from the current 74%, aiming to attract more foreign investment into the sector.
Other Changes
- The time for filing updated returns has been extended by two years.
- The threshold for Tax Collected at Source (TCS) on remittances under the Liberalized Remittance Scheme (LRS) has been increased from Rs 7 lakh to Rs 10 lakh.
- The conditions for tax relief on a second self-occupied house have been relaxed.
These updates are part of the government's efforts to simplify the tax system, boost consumption, and drive economic growth.
What's Your Reaction?
