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New income tax rules from April 1 affect salaries with new tax slabs, higher TDS thresholds, and increased tax rebates under Section 87A.
Income Tax Rule Changes From April 01.
Starting April 1, several new income tax rules announced in the Union Budget will come into effect, directly impacting employee salaries. These changes include tax rebates under Section 87A, new tax slabs and rates, ULIP changes, and more.
What Are These Changes?
1. Increase in TDS Threshold
Starting April 1, the TDS threshold for various sections has been increased. For senior citizens, the TDS limit on interest income will rise to Rs 1 lakh.
2. New Tax Slabs and Rates
0 to Rs 4 lakh – NIL
Rs 4 lakh to Rs 8 lakh – 5%
Rs 8,00,001 to Rs 12,00,000 – 10%
Rs 12,00,001 to Rs 16,00,000 – 15%
Rs 16,00,001 to Rs 20,00,000 – 20%
Rs 20,00,001 to Rs 24,00,000 – 25%
Above Rs 24,00,000 – 30%
3. Tax Rebate Under Section 87A
- The tax rebate under Section 87A has been increased from Rs 25,000 to Rs 60,
- This rebate allows for a tax-free income up to Rs 12 lakh.
4. Upgradation In TCS Rules
As of April 1, 2025, TCS rates have changed, affecting foreign travel, investments, and other transactions. Previously, TCS was applicable on amounts exceeding Rs 7 lakh, but this limit has now been raised to Rs 10 lakh.
5. Extended Time Limit For Updated Tax Returns (ITR-U)
The time limit for filing an updated ITR has been extended from 12 months to 48 months (4 years). If the return is missed for any reason, it can now be updated within four years.
6. Changes In ULIP
According to the Budget 2025, redemption proceeds from ULIPs that exceed the premium threshold of ₹2.5 lakh will be treated as capital gains and taxed under Section 112A of the Income Tax Act.
The new income tax rules coming into effect from April 1 bring significant changes that will impact salaried individuals, investors, and taxpayers. With revised tax slabs, higher rebates, updated TDS and TCS thresholds, and extended timelines for filing updated returns, the changes aim to simplify taxation while ensuring better compliance.
