Budget 2025 highlights

Let us discuss about the key points from the budget presented today. This budget will be effective for the Financial Year 2025-26.

Personal Income- tax Reforms with special focus on middle class

There is no change in income tax rates under Old regime.

There will be no income tax payable upto income of Rs.12 lakh (i.e. average income of Rs.1 lakh per month other than special rate income such as capital gains) under the new regime. This limit will be Rs.12.75 lakh for salaried tax payers, due to standard deduction of Rs. 75,000.  

In the new tax regime, the tax rates will be as below.

Rebate on income-tax 

Resident individual with total income up to Rs.7,00,000 do not pay any tax due to rebate under the new tax regime. It is proposed to increase the rebate for the resident individual under the new regime so that they do not pay tax if their total income is up to Rs.12,00,000. Marginal relief as provided earlier under the new tax regime is also applicable for income marginally higher than Rs.12,00,000.  

A few examples for calculation of tax benefit are given in the table below:

Self-occupied property for claiming home loan interest:

Presently tax-payers can claim the annual value of self-occupied properties as nil only on the fulfilment of certain conditions. Considering the difficulties faced by taxpayers, it is proposed to allow the benefit of two such self-occupied properties without any condition. 

TDS/TCS rationalization for easing difficulties:

Section	Present	Proposed Limit
193 - Interest on securities	NIL	Rs.10000
194A - Interest other than  Interest on securities	(i) 50,000/- for senior citizen; (ii) 40,000/- in case of others when payer is bank, cooperative society and post office (iii) 5,000/- in other cases	(i) 1,00,000/- for senior citizen (ii) 50,000/- in case of others when payer is bank, cooperative society and post office (iii) 10,000/- in other cases
194 – Dividend, for an individual shareholder	Rs.5000	Rs.10000
194K - Income in respect of units of a mutual fund or specified company or undertaking	Rs.5000	Rs.10000
194B - Winnings from lottery, crossword puzzle etc.	Aggregate of amounts exceeding 10,000/- during the financial year 10,000/-	10,000/- in respect of a single transaction
194D - Insurance commission	Rs.15000	Rs.20000
194G - Income by way of commission, prize etc. on lottery tickets	Rs.15000	Rs.20000
194H - Commission or brokerage	Rs.15000	Rs.20000
194-I Rent	2,40,000/- during the financial year	50,000/- per month or part of a month
194J - Fee for professional or technical services	Rs.30000	Rs.50000
194LA - Income by way of enhanced compensation	Rs.250000	Rs.500000
206C(1G) – Remittance under LRS and overseas tour program package	Rs.700000	Rs.1000000

Reducing compliance burden 

• TCS to be removed on remittances for education purposes, where such remittance is out of a loan taken from a specified financial institution. Present rate is 0.5% on above Rs.7 lacs, now made NIL.
• Reduction in compliance burden by omission of TCS on sale of specified goods. To reduce compliance burden of the taxpayers, it is proposed to no tax will be collected at source on sale of specified goods of value of more than fifty lakhs.
• Removal of higher TDS/TCS for non-filers of return of income:  To reduce compliance burden on the deductor/collector, it is proposed to omit section 206AB and section 206CCA of the Act.

ITR-U- Updated returns

Extending the time-limit to file the updated return: • It is proposed to extend the time-limit to file the updated return from the existing 24 months to 48 months from the end of the relevant assessment year. The additional tax payable shall be 60% of the aggregate of tax and interest payable on additional income for filing updated return during the period of 24 months to 36 months from the end of relevant assessment year. Additional tax payable shall be 70% of the aggregate of tax and interest payable for filing updated return during the period of 36 months to 48 months from the end of relevant assessment year subject to certain conditions.

Others:

Enhanced Credit through KCC

Kisan Credit Cards (KCC) facilitate short term loans for 7.7 crore farmers, fishermen, and dairy farmers. The loan limit under the Modified Interest Subvention Scheme will be enhanced from ` 3 lakh to 5 lakh for loans taken through the KCC. 

Credit Cards for Micro Enterprises

We will introduce customized Credit Cards with a ` 5 lakh limit for micro enterprises registered on Udyam portal. In the first year, 10 lakh such cards will be issued. 

Scheme for First-time Entrepreneurs

A new scheme will be launched for 5 lakh women, Scheduled Castes and Scheduled Tribes first-time entrepreneurs. This will provide term loans up  to ` 2 crore during the next 5 years.

Day Care Cancer Centres in all District Hospitals

Our Government will facilitate setting up of Day Care Cancer Centres in all district hospitals in the next 3 years. 200 Centres will be established in 2025-26. 

PM SVANidhi

PM SVANidhi scheme has benefitted more than 68 lakh street vendors giving them respite from high-interest informal sector loans. Building on this success, the scheme will be revamped with enhanced loans from banks, UPI linked credit cards with ` 30,000 limit, and capacity building support. 

Tourism for employment-led growth

The following measures will be taken for facilitating employment-led growth: 

1) Organizing intensive skill-development programmes for our youth including in Institutes of Hospitality Management  

2) Providing MUDRA loans for homestays

3) Improving ease of travel and connectivity to tourist destinations. Introducing streamlined e-visa facilities along with visa-fee waivers for certain tourist groups.  

FDI in Insurance Sector 

The FDI limit for the insurance sector will be raised from 74 to 100 per cent.

Section 80-IAC

It is proposed to extend the benefit provided under Section 80-IAC to startups for another period of five years, i.e. the benefit will be available to eligible start-ups incorporated before 01.04.2030.

Deduction u/s 80CCD for contributions made to the NPS Vatsalya

It is proposed to extend the tax benefits available to the National Pension Scheme (NPS) under sub-section (1B) of section 80CCD of the Income-tax Act, 1961 to the contributions made to the NPS Vatsalya accounts, as applicable.

Simplification of tax provisions for charitable trusts/institutions

It is proposed to increase the period of validity of registration of trust or institution from 5 years to 10 years for smaller trusts or institutions.