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

Sl.No.	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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