On February 1, 2025, Union Finance Minister Nirmala Sitharaman has announced several major reforms in the Union Budget 2025-26. One of the biggest changes was the increase in the tax exemption limit, where no tax is payable by individuals with an income of up to ₹12 lakh. Income tax slabs were also rationalized so that middle class gets relief. The new tax regime has provided that, for instance, those earning between ₹0 and ₹4 lakh have no tax to pay; those between ₹4 and ₹8 lakh and ₹8 and ₹12 lakh are taxed at 5 and 10 per cent, respectively. Other income tax brackets have rates between 15 and 30 per cent. The tax rebate limit under the new tax regime has been raised from ₹25,000 to ₹60,000 for individuals choosing the new tax regime. Also, the taxpayers can now claim two houses as self occupied even if they do not occupy them. The threshold for overseas remittances under the Liberalised Remittance Scheme has been raised to ₹10 lakh for Tax Collected at Source (TCS). Receipt of educational expenses from specified loans is exempt from TCS. Other key changes include extending the tax deduction benefit for NPS Vatsalya scheme to minors for contribution to National Pension Scheme and increasing the TDS limit on interest income for senior citizens from ₹50,,000 to ₹1 lakh.
Finance Minister Nirmala Sitharaman’s Budget 2025
