- NEW DELHI — As the new financial year begins on April 1, several changes in
income tax rules will come into effect.
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- These updates, announced by Finance Minister Nirmala
Sitharaman in the Union Budget 2025, aim to simplify the tax system and provide
relief to salaried employees.
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- From a higher tax-free income limit to changes in TDS rules,
these revisions will impact every taxpayer in India.
Also read: Know all about new UPI guidelines effective from April 1
- One of the biggest reliefs for taxpayers is the increase in
the tax-free income limit under the new tax regime.
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- From April 1, individuals earning up to Rs 12 lakh annually
will not have to pay any income tax. Earlier, this limit was Rs 7 lakh.
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- Additionally, salaried employees will benefit from a Rs
75,000 standard deduction, effectively making income up to Rs 12.75 lakh
tax-free.
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- However, this exemption does not apply to capital gains,
which will continue to be taxed separately.
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- The government has introduced revised tax slabs under the
new tax regime, while the old tax regime remains unchanged.
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- Income up to Rs 4 lakh will be tax-free, while earnings
between Rs 4 lakh and Rs 8 lakh will be taxed at 5 per cent.
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- The tax rates gradually increase with higher income,
reaching 30 per cent for those earning above Rs 24 lakh.
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- The rebate limit under Section 87A has been raised from Rs
25,000 to Rs 60,000, benefitting individuals earning up to Rs 12 lakh under the
new tax regime.
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- Combined with the standard deduction, this effectively
increases the tax-free income threshold to Rs 12.75 lakh. The old tax regime
remains unaffected by this change.
