The Union Budget 2025 has brought in important income tax reforms, which will benefit salaried individuals, pensioners, senior citizens, investors and students. The government has restructured the income tax slabs in India under the new tax regime to simplify the income tax return (ITR login) process, which has created higher deductions and more savings opportunities for taxpayers.



Union Budget 2025: Major Tax Reforms and their Impact on You
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Major Income Tax Announcements:


 Tax exemption on income up to ₹12 lakh:

People earning up to ₹12.75 lakh (including standard deduction) will not have to pay income tax as per the new tax slab. As a result of standard deduction, salaried employees & pensioners will get full exemption up to ₹12.75 lakh. 

 Basic exemption limit increased:

Basic exemption limit has been increased from ₹3 lakh to ₹4 lakh as per the new tax regime slabs. India's Income Tax Slabs Widening - Savings Opportunities for All Taxpayers.

₹12 lakh income: ₹80,000 savings (100% tax exemption).

₹18 lakh income: ₹70,000 savings (30% tax reduction).

₹25 lakh income: ₹1.1 lakh savings (25% tax reduction).

Simplified Income Tax Act :

A new Income Tax Act will be introduced, which will simplify tax return filing and reduce the number of tax disputes.

 Higher TDS limit for senior citizens:

The TDS (Tax Deducted at Source) limit on fixed deposit interest has been increased from ₹50,000 to ₹1 lakh, which will ease the tax home cash flow.

Tax exemption on rental income:

TDS exemption limit has been increased from ₹2.4 lakh to ₹6 lakh, which is beneficial for homeowners, including senior citizens.

Changes in Investment and Capital Gains Tax:

The increase in disposable income will increase the scope for savings and investment, but the indexation benefits of long-term debt mutual funds have not been changed.

New Tax Regime Calculator for easy comparison:

Taxpayers can compare the new regime tax slab and the old tax regime slabs using the tax calculator at www.incometax.gov.in.

Tax exemptions related to education and travel:

Tax Collected at Source (TCS) has been made zero percent on foreign transactions of more than ₹7 lakh for education expenses, but it will be applicable only if paid through loans.



Who will benefit from Budget 2025?

Salaried individuals and pensioners – More tax-free income under the new tax regime.
Senior citizens – Reduction in TDS burden on fixed deposits and rental income.
Homeowners – Reduction in tax burden on rental income, which will make property investment attractive.
Investors – Increased tax savings will increase the scope for financial growth.
Students and Parents – TCS reduction on overseas study expenses, which will make financial planning easier.



Final Verdict: Positive Budget for Taxpayers:

The Union Budget 2025 has provided significant income tax relief for taxpayers, simplified ITR filing and encouraged financial security. Whether you follow the old tax regime or the new tax regime, use the new tax regime calculator to determine the best way to save on your taxes.