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INDIAN UNION BUDGET 2025-26 - Taxation updates by CA Vishal Haresh Mehta

Writer's picture: CA Vishal MehtaCA Vishal Mehta

Summary of Certain Direct Tax Provisions from Honourable Finance Minister speech in Budget 2025

 

1)    A) No income tax payable up to income of ₹12 lakh in New Tax regime.

 

The new slabs proposed are as under:

Total Income (Rs. In lacs)

Rate of tax u/s

115BAC (1A)

1.

0- 4

0%

2.

4-8

5%

3.

8-12

10%

4.

12-16

15%

5.

16—20

20%

6.

20-24

25%

7.

More than 24 Lacs

30%

 

          B) The tax benefit for different category of taxpayers (0-24 lacs)

Total Income

Tax as per existing rates[as per Finance (No.2) Act,

2024]

Tax as per proposed rates

Benefit of Rate/Slab

Rebate Benefit [with reference to (3)]

Total Benefit[computed when compared to current slab rates]

(1)

(2)

(3)

(4)=(3)-(2)

(5)

(6)=(4)+(5)

8 lac

30,000

20,000

10,000

20,000

30,000

9 lac

40,000

30,000

10,000

30,000

40,000

10 lac

50,000

40,000

10,000

40,000

50,000

11 lac

65,000

50,000

15,000

50,000

65,000

12 lac

80,000

60,000

20,000

60,000

80,000

13 lac

1,00,000

75,000

25,000

0

25,000

14 lac

1,20,000

90,000

30,000

0

30,000

15 lac

1,40,000

1,05,000

35,000

0

35,000

16 lac

1,70,000

1,20,000

50,000

0

50,000

17 lac

2,00,000

1,40,000

60,000

0

60,000

18 lac

2,30,000

1,60,000

70,000

0

70,000

19 lac

2,60,000

1,80,000

80,000

0

80,000

20 lac

2,90,000

2,00,000

90,000

0

90,000

21 lac

3,20,000

2,25,000

95,000

0

95,000

22 lac

3,50,000

2,50,000

1,00,000

0

1,00,000

23 lac

3,80,000

2,75,000

1,05,000

0

1,05,000

24 lac

4,10,000

3,00,000

1,10,000

0

1,10,000

25 lac

4,40,000

3,30,000

1,10,000

0

1,10,000

 

2)    NO CONDITIONAL BENEFIT on declaring 2 Self Occupied Properties. (Earlier conditional benefit is now omitted) (Assessable value (AV) of SOP house property can be taken as NIL).


3)    Reduce litigations in International Taxation with expansion of Scope in Safe harbour rules.


4)     Proposes to reduce compliance burden on small charitable trust and institutions by increasing registration period form 5 years to 10 years.


5)    Now, ITR can be filed for 5 years (i.e. through Updated Return) from end of Financial Years.


6)    TDS and TCS on Sale of GOODS is proposed to be omitted. (eg. 194Q).


7)    Remove TCS on loan taken from educational institution.


8)    Limit for tax deduction of interest for senior citizens to be doubled from Rs. 50,000 to Rs. 1,00,000.


9)    TCS on remittances under LRS increased from Rs 7 lakhs to Rs 10 lakhs (Now transfer money from India to foreign country without Tax retention upto 10L Annually.


10) TDS limit under Section 194-I on rent increased from 2.4 lakhs to Rs. 6 lakhs (Tenant paying Rent upto 50,000/- do not deduct TDS on rent)


11) Insurance commission (Section 194D), commission on lottery tickets (Section 194G), and brokerage (Section 194H) – thresholds to be raised from Rs. 15,000 to Rs. 20,000.


12) Fees for professional or technical services (Section 194J) – threshold increased from Rs. 30,000 to Rs. 50,000.


13) Dividend Payment threshold increase from 5,000 to 10,000/- (Section 194).


14) Startup Incentives: Section 80-IAC tax benefits extended to startups incorporated before April 1, 2030.

 

All the Provisions will be applicable from 1st April 2025.

 

(Disclaimer : Only for Informative purpose)

 

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