Finance Minister Nirmala Sitharaman, unveiling the second full Budget of Modi 3.0, introduced key income tax revisions. In a major relief for the middle class, she announced a tax-free income limit of up to Rs 12 lakh. Additionally, the TDS threshold on rent was increased from Rs 2.4 lakh to Rs 6 lakh per year, easing the burden on small taxpayers.
Key Tax Announcements in Budget 2025
Simplified TDS Structure: The number of TDS rates and thresholds will be streamlined for better clarity. Additionally, the tax deduction limit on interest for senior citizens has been doubled from Rs 50,000 to Rs 1 lakh.
TCS on Goods Sales Removed: Finance Minister Nirmala Sitharaman proposed eliminating TCS on remittances for education if funded through a loan from a specified financial institution.
Higher TDS Limit on Rent: The annual TDS exemption limit on rent has been raised from Rs 2.4 lakh to Rs 6 lakh, benefiting small taxpayers receiving modest rental incomes.
Revised Tax Slabs Under the New Regime
In her Union Budget 2025 speech, Finance Minister Nirmala Sitharaman announced that income up to Rs 12 lakh will now be tax-free, providing significant relief to taxpayers. She emphasised that the new tax regime is designed to be simpler and more beneficial for the middle class.
Individuals earning Rs 18 lakh will save Rs 70,000 (30% reduction in tax payable).
Those earning Rs 25 lakh will see a tax cut of Rs 1.1 lakh (25% reduction in tax liability).
Here’s a look at the revised income tax slabs:
Read More About- Union Budget 2025: Big Tax Reforms, Higher TDS Limit on Rent and More
Wrapping Up
The government will introduce a new Income Tax Bill next week, Finance Minister Nirmala Sitharaman announced. The proposed bill aims to simplify the existing Income Tax law, making it more transparent and easier to understand.
*This article is for informational purposes only. This is not investment advice.
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