TAX, VIDE FINANCE BILL 2025 (Part-I)
CONTENTS
1) Rates of Taxes
2) Benefits to Individual Assessee
3)
4) Changes Relating to computation of Business Income
5) Changes in TDS and TCS Provisions
RATES OF TAXES
· In this Finance Bill, there is significant increase in the slab rates as applicable under the new tax regime for Individuals and HUF u/s 115BAC for FY 2025-26 onwards. All other Tax rates have been kept same as those in earlier years. The rates of taxes applicable for the various categories for FY 25-26 i.e. AY 26-27, are as follows: –
·
|
Income Slab |
Tax Rates |
|
Income up to Rs. 4,00,000 |
Nil |
|
Income from Rs. 4,00,001 to 8,00,000 |
5% |
|
Income from Rs. 8,00,001 to 12,00,000 |
10% |
|
Income from Rs. 12,00,001 to 16,00,000 |
15% |
|
Income from Rs. 16,00,001 to 20,00,000 |
20% |
|
Income from Rs. 20,00,001 to 24,00,000 |
25% |
|
Income exceeding Rs.24,00,000 |
30% |
· The surcharge rates for individuals under new regime are as under: -
Income Slab Surcharge Rates
Income up to Rs.50 Lakhs Nil
Income from Rs.50 Lakhs to 1 crore 10%
Income from Rs. 1 crore to Rs. 2 Crores 15%
Income exceeding Rs. 2 crores 25%
Maximum rate of surcharge
in case of LTCG, STCG and Dividend
income has been capped at 15%.
Under new regime u/s 115BAC maximum
rate of surcharge is restricted to 25% instead of 37% in the old slab.
· Tax rate for the partnership firms and companies
have been kept as it is.
· The Health and Education Cess at a rate of 4% to continue. Marginal relief as applicable earlier will continue as it is.
· Section 87A – Rebate under this section is proposed to be increased from 25,000/- to 60,000/-, for individual assessee who have opted to file ITR u/s 115BAC, w.e.f. AY 2026-27. The limit of maximum amount of income eligible for rebate under this section has been increased from Rs.7,00,000/- to Rs.12,00,000/-.
Further a new proviso has been inserted which puts a restriction on the allowability of rebate u/s 87A towards the tax payable on all the income which are chargeable to tax on special rate instead of slab rates. This restriction is only in case of assessee who have opted for new tax regime u/s 115BAC [w.e.f. AY 2026-27].
OTHER
BENEFITS TO INDIVIDUAL ASSESSEE
· Section 17(2) – It is proposed to modify the
salary limits for normal employees i.e. other than those who are directors and
persons having substantial interest, for the purpose of the taxability of
perquisite [w.e.f. AY 2026-27] The changes are as under:-
a)
b) Any
expenditure incurred by the employer
towards the medical
treatment of an employee
or his family member out of India,
was taxable in the hands of
the employees whose salary exceeded
Rs.2,00,000/-. Now this limit is set to be enhanced by such amount as may be
prescribed.
· Section 23 – W.e.f. AY 2025-26, it is proposed
to simplify the definition of self- occupied property, to allow an assessee to
declare 2 house properties as self- occupied and be exempt from charging of
notional rent.
· 80CCA – A
new proviso is proposed to be introduced to provide 100% exemption
of the amounts withdrawn from the National Saving Scheme (NSS) on or after 29.08.2024.
· Section 80CCD – This section is proposed to be amended
to allow deduction under this section of the
amounts paid under the NPS scheme for the minors. The deduction is allowed to parent or the guardian
subject. However, the overall limit of deduction under this section has
been retained at Rs.50,000/- only. Corresponding changes have made for taxation
of the amount withdrawn from the NPS of minors.
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