Income Tax Rules: Some big announcements were made regarding income tax rules in Budget 2024-25 which you all should know.
Income Tax Rules: The country’s Finance Minister Nirmala Sitharaman will present the Budget 2025 on February 1, 2025. With this budget, the common citizens have a lot of hope that the government can make some big announcements for them. The salaried class is also sitting with a lot of expectations from the budget. Some big announcements were made regarding income tax rules in Budget 2024-25 which you all should know.
Announcement of new tax slab
In the new tax system, changes have been made in the tax slab so that taxpayers can get more relief. The new tax slabs were as follows.
Rs 0-3 lakh: 0% tax
Rs 3-7 lakh: 5%
Rs 7-10 lakh: 10%
Rs 10-12 lakh: 15%
Rs 12-15 lakh: 20%
Rs 15 lakh and above: 30%
These new slabs can help taxpayers save up to Rs 17,500.
Increase in standard deduction
The limit of standard deduction was increased from Rs 50,000 to Rs 75,000
The limit for family pensioners was also increased from Rs 15,000 to Rs 25,000
This will provide relief to salaried and retired taxpayers.
Additional deduction on contribution to NPS
The deduction limit on employer’s contribution to the National Pension System (NPS) was increased from 10% to 14%. This change will help employees to save more in their retirement fund.
Changes in Capital Gains Tax
Tax rate on Short Term Capital Gains Tax (STCG) increased from 15% to 20%
Tax rate on Long Term Capital Gains Tax (LTCG) increased from 10% to 12.5%
LTCG exemption limit on equity investments increased from Rs 1 lakh to Rs 1.25 lakh
This change was aimed at encouraging investors to invest in the long term
TCS on Luxury Goods
Tax Collection at Source (TCS) was implemented on luxury goods worth more than Rs 10 lakh. This rule became effective from January 1, 2025.
The decision was aimed at keeping a check on expensive transactions and reducing tax evasion
