The Union Budget 2025-26, set to be implemented from April 1, 2025, introduces significant changes aimed at providing relief to the middle class, salaried individuals, and businesses. Key highlights include new tax slabs, increased TDS limits, benefits for senior citizens, and updated rules for foreign education funds. Additionally, custom duty adjustments will impact prices of 150-200 products. While some benefits will be immediate, social welfare schemes and infrastructure projects will roll out gradually.
New Income Tax Slabs: Big Relief for Salaried People
The new tax regime offers zero tax on an annual income of ₹12.75 lakh. This includes a ₹75,000 additional benefit for salaried individuals.
New Slab:
25% tax for incomes between ₹20-24 lakh annually.
Impact:
Middle and upper-middle-class people will save more as the tax slab for ₹15 lakh income has increased to ₹24 lakh.
TDS Limit Increased: More Money in Your Pocket
No Tax on ₹6 Lakh Rental Income: Earlier, TDS was applicable on ₹2.4 lakh rental income. Now, it’s raised to ₹6 lakh.
Senior Citizens: TDS on interest income from fixed deposits has been increased from ₹50,000 to ₹1,00,000 annually.
Professional Services: TDS limit raised from ₹30,000 to ₹50,000 per year.
Impact: Individuals earning less will benefit as more income will remain tax-free.
TCS Limit Increased for Foreign Education
Students studying abroad can receive up to ₹10 lakh without TCS (earlier limit was ₹7 lakh).
Impact: Easier fund transfers for students and their families, reducing the hassle of paying extra tax.
More Time to File Updated Tax Returns
Taxpayers can file updated returns within 48 months of the financial year’s end (earlier it was 24 months).
Tax Rates for Late Filing
- 60% tax if filed between 24-26 months
- 70% tax if filed between 36-48 months
Impact: More time to correct mistakes and ensure self-compliance with tax laws.
Capital Gains Tax on ULIPs
Premiums above ₹2.5 lakh in ULIPs will be taxed as capital gains.
Tax Rates:
- 12.5% for long-term (over 12 months)
- 20% for short-term (less than 12 months)
Impact: Higher premium investors will have to pay tax, stopping misuse of ULIPs for tax rebates.
Custom Duty Changes on 150-200 Products
Reduced Duties: Cheaper imported cars (3000 CC), motorcycles (1600 CC), life-saving medicines, and EVs (due to reduced duties on battery production).
Increased Duties: Imported shoes, smart meters, LCD/LED TVs, PVC products, and certain clothes.
Impact: Some products will become cheaper, while others will cost more.
When Will You See the Benefits?
Immediate Benefits: Income tax changes, TDS limits, and TCS adjustments from April 1, 2025.
Delayed Benefits: Social welfare schemes (for farmers, women, employment) starting from June-July.
Infrastructure projects like roads, railways, schools, and hospitals will take time as they go through contract processes.
