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The Indian tax landscape is undergoing important modifications starting April 2025. These changes will affect how individuals and businesses calculate their tax liabilities. This article provides a clear breakdown of the upcoming adjustments to help you prepare for the new financial year.
1. Tax Slab Revisions for FY 2025-26
New Tax Regime (Default Option)
The government has maintained the new tax regime as the default system with these brackets:
| Income Range (₹) | Tax Rate |
|---|---|
| Upto Rs.4 lakh | 0% |
| Rs. 4 lakh - Rs.8 lakh | 5% |
| Rs.8 lakh - Rs.12 lakh | 10% |
| Rs.12 lakh - Rs.16 lakh | 15% |
| Rs.16 lakh - Rs.20 lakh | 20% |
| Rs.20 lakh - Rs.24 lakh | 25% |
| Above Rs.24 lakh | 30% |
• The Section 87A rebate ceiling has been raised to ₹7,00,000 (from ₹5,00,000)
Old Tax Regime (Optional)
Taxpayers can still choose the traditional regime with these rates:
| Income Range (₹) | Tax Rate |
|---|---|
| 0 - 2,50,000 | 0% |
| 2,50,001 - 5,00,000 | 5% |
| 5,00,001 - 10,00,000 | 20% |
| Above 10,00,000 | 30% |
2. Modifications in Standard Deduction
• The standard deduction for salaried individuals remains at ₹50,000
• Pensioners continue to receive the same ₹50,000 benefit
3. Updates on Deductions and Exemptions
Section 80C Investments
• The maximum deduction limit stays at ₹1,50,000
• No new investment categories have been added for FY2025-26
House Rent Allowance (HRA)
• Existing HRA exemption rules remain unchanged
• PAN submission requirement continues for annual rent payments exceeding ₹1,00,000
Capital Gains Taxation
• Equity LTCG tax remains at 10% for gains above ₹1,00,000
• STCG on equities continues at 15%
• Cryptocurrency gains taxation stays at 30%
4. TDS/TCS Regulation Changes
• TDS threshold for freelance payments remains at 10%
• No changes to TCS rates under LRS scheme
5. Digital Compliance Enhancements
• E-filing remains mandatory for incomes exceeding ₹5,00,000
• Pre-filled ITR forms will include additional financial data points
6. Penalty Structure
• Late filing fee stays at ₹5,000 (₹1,000 for incomes below ₹5,00,000)
• Advance tax payment penalties remain unchanged
Tax Planning Recommendations
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Evaluate both tax regimes carefully before filing
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Maximize Section 80C investments before year-end
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Maintain proper documentation for HRA claims
-
Consider tax implications before selling investments
-
File returns before the deadline to avoid penalties
Conclusion
The April 2025 tax changes maintain stability in most areas while introducing minor adjustments. Taxpayers should review their financial plans considering these updates. For complex situations, consulting a tax professional remains advisable.
