The Indian government presented the Union Budget for 2025-26 on February 1, 2025, led by Finance Minister Nirmala Sitharaman. This budget is important because the country is facing issues like slow economic growth, rising prices, high loan interest rates, and unemployment. The main goal of the government is to boost the economy by investing in key sectors and introducing new policies.
Income up to ₹4 lakh – No tax
₹4 lakh to ₹8 lakh – 5% tax
₹8 lakh to ₹12 lakh – 10% tax
₹12 lakh to ₹16 lakh – 15% tax
₹16 lakh to ₹20 lakh – 20% tax
₹20 lakh to ₹24 lakh – 25% tax
Above ₹24 lakh – 30% tax
Finance Minister Nirmala Sitharaman sets the fiscal deficit target at 4.4% of GDP for 2025-26.
Finance Minister Nirmala Sitharaman announced raising FDI limits in the insurance sector from 74% to 100%, with some restrictions.
The government will give up ₹1 lakh crore in direct taxes and ₹2,600 crore in indirect taxes due to changes in tax rates.
Senior citizens can now get a tax deduction of up to ₹1 lakh on interest income, and TDS on rent will only apply if the amount exceeds ₹6 lakh.
People earning ₹18 lakh per year will save ₹70,000 in taxes.
Those earning ₹12 lakh per year will save ₹80,000 in taxes.
No income tax will be payable on earnings up to ₹12 lakh under the new regime, as announced by Finance Minister Nirmala Sitharaman, keeping in mind the middle class’s contribution to the economy.
The authorities have extended the deadline to file updated returns from 2 years to 4 years to promote voluntary compliance.
Just like the relief for TDS payment delays, the same will apply to TCS rules as well.
The proposal is to remove TCS on education remittances paid through a loan from a recognized financial institution.
TCS on goods sales will be removed to make compliance easier.
Doubling the interest tax deduction limit for senior citizens from ₹50,000 to ₹1,00,000.
Raising the TDS limit on rent from ₹2.40 lakh to ₹6 lakh for small taxpayers.
Increasing the TCS threshold for remittances under LRS from ₹7 lakh to ₹10 lakh.
Financial Minister said: “My tax proposals aim to make business easier, encourage people to follow tax rules willingly, and reduce the burden of compliance.
These changes focus on reforming personal income tax, especially for the middle class, simplifying TDS and TCS, and promoting job creation and investment.”
Finance Minister Nirmala Sitharaman talked about the government’s tax reforms to make things easier for taxpayers. These include faceless assessments, the taxpayer charter, and faster return processing. With 99% of returns based on self-assessment, the approach is “trust first, scrutinize later.” She also mentioned that they will introduce a new income tax bill next week to continue improving the system.
The new income tax bill is clear and simple, making it easier for both taxpayers and tax administrators to understand and use. Its straightforward language eliminates confusion, ensuring a more user-friendly experience for everyone.
The government will focus on 5.7 crore MSMEs, including 1 crore registered businesses that employ 7.5 crore people and contribute 36% to India’s manufacturing.
To boost growth, the government will increase investment and turnover limits for MSMEs by 2.5 times and 2 times, respectively.
India’s foreign exchange reserves cover 90% of external debt and almost 11 months of imports, making it one of the top four reserve holders globally.
Due Dates of GST return 2025-26
Check TDS return status with PAN No
Intimation notice of Income Tax Act
12A & 80G Compliance of Income Tax Act
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