The last budget presented in July 2024 introduced some changes under the new tax regime, ranging from revised tax slabs to increased standard deduction. This time, possible changes are expected in income tax slabs, capital gains tax and benefits for salaried individuals.
Tax Rules Change: Budget 2025 is about to come, for which taxpayers are once again hoping that the government can make some special announcements in the budget. In the last budget presented in July 2024, some changes were made under the new tax system, which included revised tax slabs and increased standard deduction. This time there is hope for possible changes in income tax slabs, capital gains tax and benefits for salaried individuals.
It will be interesting to see what changes the government makes regarding tax in the budget, but before that it is important for you to know what are the 5 major changes the government has made regarding income tax in the last 6 months from the last budget till now?
1. New tax slab
The government had introduced the new tax slab so that taxpayers can get more relief.
Rs 0-3 lakh: 0% tax
Rs 3-6 lakh: 5%
Rs 6-9 lakh: 10%
Rs 9-12 lakh: 15%
Rs 12-15 lakh: 20%
Rs 15 lakh and above: 30%
These new slabs can help middle-income taxpayers save up to Rs 17,500. This new slab is applicable from April 1.
2. Increase in standard deduction
The government had increased the limit of standard deduction from Rs 50,000 to Rs 75,000, the limit for family pensioners has also been increased from Rs 15,000 to Rs 25,000.
3. Extra exemption on contribution to NPS
The deduction limit on employer’s contribution to the National Pension System (NPS) has been increased from 10% to 14%. This change will encourage employees to save more in their retirement fund.
4. Changes in capital gains tax
The tax rate on short term capital gain (STCG) has been increased from 15% to 20%.
The tax rate on long term capital gain (LTCG) has been increased from 10% to 12.5%.
The LTCG exemption limit on equity investments has been increased from Rs 1 lakh to Rs 1.25 lakh.
5. TCS on luxury items
Tax collection at source (TCS) has been implemented on luxury items worth more than Rs 10 lakh. This rule is effective from January 1, 2025.
