The Finance Minister has introduced the Income-Tax Bill 2025, marking a significant step toward a simplified, modern, and efficient tax framework without making significant changes to the existing law. This initiative aligns well with India’s push for ease of doing business and supports the country’s vision of becoming a developed economy by 2047.
Key highlights towards simplified regime:
- New tax code – Introduction of a new Tax Bill which aims to replace existing Income Tax Act, 1961. This is designed to simplify tax compliance and reduce the complexity of Tax Laws.
- Changes in Tax Rates – Tax rates in New Regime have been changed to super-incentivise the consumer class. Tax by individual earning salaries upto 12.75 lacs doesn’t have to pay taxes at all.
- Rationalisation of TDS/TCS for Easing Difficulties – Various limits have increased to practical levels. Some sections have even been omitted eg 206C(1H).
- Extentsion of Time Limit for Filing of ITR-U – •The deadline for taxpayers to file updated income tax returns has been extended from 2 years to 4 years from the end of the relevant assessment year.
- Startup Benefit Extension – Exemption benefit for eligible Startups u/s 80-IAC has been extended till 2030.
- Others– Various other reforms for simplification and plugging lacunas in tax laws have been placed having impact over some specific sectors of the economy.
Tax Rates Under New Tax Regime
•The tax rates under the old regime continue to remain the same. Applicable with effect from FY 2025-26
Benefits under new regime as per section 115BAC – To encourage more individuals to opt for new regime
The limit of total income for rebate for individual resident is proposed to be increased from INR 7,00,000 to INR 12,00,000 and the limit of rebate from INR 25,000 to INR 60,000 under the new regime.
Standard Deduction in New Regime has been increased from INR 50,000 to INR 75,000 ensuring that salary earners upto INR 12,75,000 does not have to pay taxes at all.
Such rebate of income tax is not applicable for special rates of income (for eg: Capital gains u/s 111A, 112 etc.)
Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit. Lorem ipsum dolor sit amet, consectetur adipiscing elit.
The deadline for incorporation of start-up to claim deduction under the section 80IAC has now been extended till 2030. If you are a start-up eligible under section 80IAC, you can claim deduction under this section even if you start your business until 2030.
Senior Citizens
Broadly speaking, bank interest up-to Rs.1,00,000 per annum is not subject to TDS deduction. This limit was previously Rs.50,000.
The Budget 2025 has provided benefits and launched various new schemes to boost agriculture, startups, industry, MSMEs, education, medical and logistics.
Reach Us Today For More Updates…
