There is only a little time left for the new financial year to begin. Along with this, many rules related to income tax are going to change.
New Income Tax Rules: There is only a little time left for the new financial year to begin. Along with this, many rules related to income tax are going to change. Many important announcements were made by Finance Minister Nirmala Sitharaman in the General Budget 2025, which are coming into effect from April 1, which will have a direct impact on the pockets of salaried people.
These new rules include more exemptions in income tax and changes in TDS rules. The increased exemptions in income tax under the new tax regime announced by the Finance Minister in the budget are coming into effect from April 1. Now people with an annual income of up to Rs 12 lakh will come under the purview of income tax exemption. Earlier this figure was Rs 7 lakh.
Apart from this, if the standard deduction of Rs 75,000 given to salaried people is added, then the income tax exemption increases to Rs 12.75 lakh. However, capital gains are not included in the income tax exemption. A separate tax will be levied on it. The government has also introduced new tax slabs under the new tax regime, while no changes have been made in the old tax regime.
Now under the new tax regime, income up to Rs 4 lakh will be tax-free, while income between Rs 4 lakh and Rs 8 lakh will be taxed at 5 percent. As the income increases, the tax rates will gradually increase and it will reach 30 percent on income above Rs 24 lakh.
The central government has increased the tax exemption under section 87A from Rs 25,000 to Rs 60,000 in the budget, which will make income up to Rs 12 lakh tax-free in the new tax regime.
The limit of TDS deduction on interest received on bank deposits has been increased from Rs 40,000 to Rs 50,000. This means that now no TDS will be deducted on the amount up to Rs 50,000 received on bank deposits.
From April 1, benefits and allowances given by employers will no longer be classified as taxable facilities. Additionally, if an employer bears the cost of medical treatment abroad for an employee or his family, this expenditure will not be considered a taxable benefit.
Taxpayers will now have four years instead of two to file updated income tax returns (ITR-U). This extension allows individuals to correct errors or omissions in their tax filings for a longer period of time. A new tax-saving option has been introduced for parents. Those who contribute to their child’s NPS Vatsalya account can claim an additional deduction of Rs 50,000 under the old tax regime.
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