New Delhi, Feb 1 (NVI) In a huge relief to the Middle Class and Income Tax payers, Union Finance Minister Nirmala Sitharaman today proposed sweeping tax reforms in the Budget 2025.
She said there will be “Zero tax” on income of up to Rs 12 lakh per annum and announced new Income Tax slabs which came as much-needed relief for the India’s middle class.
Following the announcement, tax payers with a normal income (excluding special rate income like capital gains) of up to Rs 12 lakh per financial year will have no tax liability due to a rebate and reduced slab rates.
Those earning up to Rs 12 lakh per annum will receive a tax benefit of Rs 80,000, which covers 100% of their tax payable under existing rates.
For an income of Rs 18 lakh per annum, there will be a benefit benefit is Rs 70,000, covering 30% of the tax payable.
Similarly, a person earning Rs 25 lakh per annum will get a benefit of Rs 1,10,000, which accounts for 25% of their tax liability under the current rates.
In other tax-related reliefs, Sitharaman proposed increase in the threshold for Tax Deduction at Source (TDS) on rent from Rs 2.40 lakh per annum to Rs 6 lakh per annum.
This effectively raises the monthly limit for TDS deduction on rent from Rs20,000 to Rs50,000, benefiting small taxpayers and easing compliance burdens.
In relief to the senior citizens, she proposed to double the limit for tax deduction on interest from the present Rs 50,000 to Rs 1,00,000 per annum.
The Finance Minister also announced that Tax Collected at Source (TCS) on remittances under the RBI’s Liberalized Remittance Scheme (LRS) has been increased from to Rs 10 lakh from Rs7 lakh, and TCS on remittances for education purposes, where the remittance is out of a loan from a financial institution, has been removed. (NVI)
