Finance Minister Nirmala Sitharaman’s Budget 2025 introduces a revamped income tax regime, offering significant relief to middle-income earners. Under the revised structure, annual income up to ₹12 lakh is now tax-free, with an effective exemption of ₹12.75 lakh for salaried individuals, factoring in the ₹75,000 standard deduction. The new tax slabs range from 0% for income up to ₹4 lakh to 30% for income exceeding ₹24 lakh.
Key changes include a higher TDS exemption on rent, raised from ₹2.40 lakh to ₹6 lakh, and an increased TCS threshold for foreign remittances, now ₹10 lakh. Senior citizens benefit from a doubled tax deduction on interest income, raised from ₹50,000 to ₹1 lakh. Additionally, taxpayers can now claim two self-occupied properties as having nil annual value, easing financial burdens. Compliance for charitable trusts has also been simplified, with the registration period extended from five to ten years.
To enhance tax transparency, the updated returns filing window has been extended to four years, and a new Income Tax Bill will be introduced to streamline compliance. These measures are expected to boost disposable income, stimulate economic growth, and simplify tax filing, aligning with the government’s vision for a formalized and consumption-driven economy.
