Income Tax News: BIG Changes On Cards! These Rules to Change From April 1, 2025, Check

With the new financial year 2025-26 approaching, several income tax rule changes will come into effect from April 1, 2025. These changes, introduced through the Finance Bill 2025, will impact salaried employees significantly, affecting tax rebates, slabs, deductions, and other tax provisions.

Here are the 7 key income tax rule changes that taxpayers must be aware of:

1. Higher Tax Rebate Under Section 87A

The tax rebate under Section 87A will increase from ₹25,000 to ₹60,000 under the new tax regime.

This will make taxable income up to ₹12 lakh tax-free (excluding capital gains).

For salaried employees, the limit will go up to ₹12.75 lakh, considering the ₹75,000 standard deduction.

The old tax regime rebate remains unchanged.

2. Revised Tax Slabs and Rates

Basic exemption limit in the new regime will increase from ₹3 lakh to ₹4 lakh.

The highest 30% tax rate will now apply to incomes above ₹24 lakh.

No changes have been made to the old tax regime slabs and rates

3. Increased TDS Thresholds

The minimum amount for TDS/TCS deductions will be increased across various transactions.

For salaried employees, the TDS threshold on bank deposits will increase from ₹40,000 to ₹50,000.

4. New Perquisite Rules

Certain benefits and amenities provided by employers will no longer be treated as perquisites.

Employer-paid expenses for medical treatment outside India (for employees or their family members) will also be exempt from perquisite tax.

5. ULIP Taxation Changes

ULIP (Unit Linked Insurance Plan) redemption proceeds exceeding the premium threshold of ₹2.5 lakh will now be taxed as capital gains under Section 112A of the Income Tax Act.

6. Additional NPS Deduction for Parents

Parents can now contribute to their child’s NPS Vatsalya account and claim an additional ₹50,000 deduction under the old tax regime.

7. Simplified Self-Occupied Property Taxation

Taxpayers can now claim nil annual value on up to two properties, regardless of whether they are self-occupied or not.

These income tax rule changes will have a significant impact on salaried employees, allowing better tax planning for the financial year 2025-26. Stay informed to make the most of these updates!

Would you like a detailed tax-saving guide based on the new rules?