Budget 2025: All You Need To Know About Tax Reliefs, Rent TDS Changes, And Senior Citizen Benefits

The Union Budget 2025 has opened a raft of tax reforms that aim to lighten the burden on taxpayers and make compliance easier. This includes higher income limits for exempt income, respite for house renters, and benefits for elderly citizens, all of which bear on you. Here are the most critical changes summarized in this article

Tax-Free Income Increases:

The government has, this year, increased the tax-free income limit up to ₹4 lakh. It has maintained progressive tax slabs so that middle-income people get lower rates. Here’s the new tax structure:

• 0% tax on income up to ₹4 lakh
• 5% on income from ₹4 lakh to ₹8 lakh
• 10% on income from ₹8 lakh to ₹12 lakh
• 15% on income between ₹12 lakh and ₹16 lakh
• 20% on income between ₹16 lakh and ₹20 lakh
• 25% on income between ₹20 lakh and ₹24 lakh
• 30% on income more than ₹24 lakh

The new slab system will be likely to raise disposable income, especially for the ₹7-12 lakh a year earner.

Major Tax Reliefs Announced:

Rent TDS Exemption Increased The TDS on rent has now been increased to ₹6 lakh from ₹2.40 lakh. This move will be extremely relieving to tenants as well as landlords alike.

Foreign Remittance Compliance Eased:

The threshold for TCS on foreign remittances has been raised under the Liberalised Remittance Scheme (LRS) to ₹10 lakh from ₹7 lakh, thus relieving more persons of transferring abroad, with ease in compliance burden.

Tax Benefits for Senior Citizens:

To benefit the senior citizens, the deduction on interest income is raised to ₹1 lakh from ₹50,000, which is likely to ease their overall tax burden.

Relief to Homeowners:

Taxpayers can now declare two self-occupied properties as having nil annual value, eliminating the previous limitations and benefiting those owning multiple homes.

Charitable Trusts and Compliance Simplification:

The registration period for small charitable trusts and institutions has been extended from 5 years to 10 years, easing administrative requirements.

Extended Window for Filing Updated Tax Returns:

Taxpayers can now file updated income tax returns up to four years instead of the previous two-year limit, increasing the liberty of compliance for them.

A New Income Tax Bill Ahead:

Finance Minister Nirmala Sitharaman has come up with a new Income Tax Bill to be placed in the next week. This bill is designed to simplify tax laws, cut down litigation, and ensure economic stability.

The reforms will benefit the government in its pursuit of ease of tax compliance, boost economic growth, and put more money in middle-income taxpayers’ pockets.