The Union Government of India today presented the Budget 2025. This budget is applicable for the Financial Year 2025-26 ( Assessment year 2026-27). The Annual budget is a Statement of Estimated Receipts and Expenditure  for 2025-26. Besides changes to Personal Taxation, The pillar of changes and focus in this budget has been: Taxation, Power, Urban development, Finance, Regulatory Reforms & Agriculture.  

On the Personal Taxation front:

  1. Changes to Tax Slabs for those opting the New Regime under Sec 115BAC. This is applicable across all age groups incl Senior Citizens & Super Senior Citizens.

Taxable Income Range

Tax Rates

Upto Rs.400000

Nil

Rs.400001 to Rs.800000

5%

Rs.800001 to Rs.1200000

10%

Rs.1200001 to Rs.1600000

15%

Rs.1600001 to Rs.2000000

20%

Rs.2000001 to Rs.2400000

25%

Above Rs.2400001

30%

 

  1. There are no changes in the Tax slabs for those opting the Old regime.
  2. However, Surcharge for those earning a Taxable income of > 5 Crores is reduced from 37% to 25% under the OLD regime
  3. There are no changes to Standard deduction and it remains the same as last year respectively for both regimes.
  4. Impacts to Rebate under 87A will be come to play with the above Tax changes. Effectively, an increase from 25000 to 60000 due to slab changes.
  5. Marginal relief also will also change to those due to tax slab changes for Surcharge related calculations
  6. A New Income Tax Bill will be tabled in the parliament in the coming week ( in the Budget session) which is expected to simplify the current Act and make it more comprehendible and lucid. It is expected to reduce the content by over 50%. The overarching objective is to reduce litigations due to interpretational issues. This could have impacts in our product.
  7. Changes to Self-Occupied property claim for Annual Value upto 2 houses. Better Clarity awaited as to its applicability.
  8. Certain threshold for deduction of TDS for Senior Citizens & for payments towards Rent has been made. However this does not impact our product.
  9. Withdrawals from National Savings Scheme post August 29, 2024 made tax-free for Sr Citizens & Super Senior Citizens.