Several Income Tax Rules to Change from April 1 as New Financial Year Begins
New Delhi, March 30 – With less than 48 hours remaining for the start of the new financial year, several key changes in income tax rules are set to come into effect from April 1, 2025. These changes, announced by Finance Minister Nirmala Sitharaman in the Union Budget 2025, are expected to significantly impact salaried individuals.
As per agency report, one of the most notable changes is the expansion of the tax exemption limit under the new tax regime. Starting April 1, annual incomes up to Rs 12 lakh will now be exempt from income tax, a significant increase from the previous limit of Rs 7 lakh. When combined with the standard deduction of Rs 75,000 for salaried individuals, the effective tax-free income threshold rises to Rs 12.75 lakh.
However, capital gains are excluded from this exemption and will continue to be taxed separately. The government has introduced new tax slabs under the revised tax regime, while the old regime remains unchanged. Under the new structure, income up to Rs 4 lakh will be tax-free, income between Rs 4 lakh and Rs 8 lakh will be taxed at 5 percent, and the rate will progressively increase, reaching up to 30 percent for income exceeding Rs 24 lakh.
The tax rebate under Section 87A has also been enhanced, increasing from Rs 25,000 to Rs 60,000. This change further ensures that income up to Rs 12 lakh will remain tax-free under the new regime.
In a move to provide relief to depositors, the threshold for TDS (Tax Deducted at Source) on bank interest income has been raised from Rs 40,000 to Rs 50,000. This means that no TDS will be deducted on interest earnings up to Rs 50,000.
From April 1, benefits and allowances provided by employers will no longer be classified as taxable perks. Additionally, any expenses incurred by employers for the medical treatment of employees or their families abroad will not be considered taxable income.
The deadline to file updated income tax returns (ITR-U) has been extended from two years to four years, allowing taxpayers more time to correct errors or omissions in their filings.
A new tax-saving option has also been introduced for parents. Those contributing to their child’s NPS Vatsalya account can claim an additional deduction of Rs 50,000 under the old tax regime.
These changes reflect the government’s effort to simplify the tax structure and provide greater flexibility and benefits to taxpayers ahead of the new fiscal year.
