Synopsis
In a major announcement for the middle class, Finance Minister Nirmala Sitharaman declared no income tax for incomes up to Rs 12 lakh and Rs 12.75 lakh for salaried taxpayers. The new tax structure aims to provide significant relief and includes changes to TDS rates and limits.Key Takeaways
- No income tax on earnings up to Rs 12 lakh.
- Revised tax structure for different income brackets.
- Increased TDS limit for senior citizens to Rs 1 lakh.
- Extended timeframe for filing updated returns to four years.
- TCS on educational loans has been waived.
New Delhi, Feb 1 (NationPress) In a significant relief for the Indian middle class, Finance Minister Nirmala Sitharaman announced on Saturday that no income tax will be applicable on earnings up to Rs 12 lakh, and Rs 12.75 lakh for salaried individuals (which includes the standard deduction).
Under the newly established tax regime, the updated tax rate structure is as follows: Rs 0-4 lakh (zero tax), Rs 4-8 lakh (5 percent), Rs 8-12 lakh (10 percent), Rs 12-16 lakh (15 percent), Rs 16-20 lakh (20 percent), Rs 20-24 lakh (25 percent), and above Rs 24 lakh (30 percent).
"The revised tax framework will significantly lessen the tax burden for the middle class," declared FM Sitharaman.
While presenting the Union Budget for 2025-26, FM Sitharaman highlighted that the tax deduction at source (TDS) rates will be optimized and the limit for TDS applicable to senior citizens will be increased to Rs 1 lakh.
Additionally, she proposed extending the timeframe for filing revised returns from two years to four years.
The threshold for collecting TDS on remittances through the Liberalised Remittance Scheme (LRS) will be raised to Rs 10 lakh from Rs 7 lakh, while the annual limit for TDS on rental income has been elevated from Rs 2.4 lakh to Rs 6 lakh.
FM Sitharaman also stated that delays in TCS payments up to the due date would be decriminalized, and mentioned that TCS on educational loan remittances has been eliminated.
The budget further suggests that withdrawals from National Savings Scheme (NSS) accounts on or after August 2024 will be tax-exempt.
The Parliament's Budget Session, which commenced on Friday, will occur in two segments: the initial part runs from January 31 to February 13, while the second segment will take place from March 10 to April 4.
