Accounting
No Responses April 5, 2025

Starting April 1, 2025, significant amendments to India’s income tax laws have come into force. These changes are aimed at simplifying the tax structure, offering greater relief to taxpayers, and boosting economic growth. As a trusted financial advisory and consulting firm, Aplite Advisors brings you a comprehensive summary of the 10 most important updates every taxpayer must know.

1. Restructured Income Tax Rates Under the New Regime

To ease the tax burden, the government has introduced a new tax structure under the simplified regime. The updated income tax slabs are:

  • Income up to ₹4 lakh: No Tax
  • ₹4 lakh to ₹8 lakh: 5%
  • ₹8 lakh to ₹12 lakh: 10%
  • ₹12 lakh to ₹16 lakh: 15%
  • ₹16 lakh to ₹20 lakh: 20%
  • ₹20 lakh to ₹24 lakh: 25%
  • Above ₹24 lakh: 30%

These revised slabs aim to make taxation more equitable and encourage higher compliance.

2. Higher Standard Deduction for Salaried Individuals

The standard deduction has been increased from ₹50,000 to ₹75,000, giving salaried employees and pensioners additional tax benefits. Combined with the new slabs, income up to ₹12.75 lakh can now effectively become tax-free, ensuring significant savings.

3. Full Tax Exemption under Section 87A

Taxpayers with a total income up to ₹12 lakh can now avail a full rebate under Section 87A. This move effectively reduces their tax liability to zero, providing a major relief to the middle-class segment.

4. Increased TDS Thresholds on Interest Income

The exemption limit for Tax Deducted at Source (TDS) on interest income has been increased to ₹1 lakh for senior citizens. This ensures greater financial comfort for retirees who rely on fixed deposits and other interest-based earnings.

5. Abolition of Equalisation Levy on Digital Ads

To bolster the digital economy, the 6% Equalisation Levy on online advertisements has been abolished. This reform benefits tech companies, advertisers, and the broader online ecosystem, encouraging digital innovation and investment.

6. Updated Tax Audit Reporting Standards

Form 3CD, used for tax audit reporting, has been revised. Businesses and tax professionals must update their compliance and reporting processes to align with the new standards. This move aims to streamline financial disclosures and ensure greater transparency.

7. Higher TDS Threshold on Rental Income

The TDS threshold on rent payments has been raised from ₹20,000 to ₹50,000 per month. This revision provides substantial relief to small property owners, reducing their compliance burden and enhancing rental income efficiency.

8. Enhanced Tax Relief for Homeowners

Owning multiple homes has become more tax-efficient. The second self-occupied property will now be exempt from deemed rental income taxation, encouraging investments in real estate without additional tax implications.

9. Unified Pension Scheme for Seamless Retirement Planning

A Unified Pension Scheme has been introduced to integrate various pension programs across sectors. This streamlined approach makes retirement planning simpler and more secure for employees and retirees alike.

10. UPI ID Deactivation for Inactivity

As a proactive security measure, unused UPI IDs will now be automatically disabled. Users must ensure regular activity on their UPI IDs to avoid disruptions and maintain seamless access to digital banking services.

Final Thoughts by Aplite Advisors

These major amendments mark a transformative step towards a simplified, taxpayer-friendly, and digitalized financial ecosystem in India. At Aplite Advisors, we are committed to helping you navigate these changes efficiently. Whether you’re a salaried individual, business owner, or senior citizen, our expert Chartered Accountants (CAs) and financial consultants in Delhi are here to guide you through customized tax planning and compliance strategies.

Need assistance with your tax planning or financial compliance?

Contact Aplite Advisors today for expert advice and personalized solutions!