Indian Budget 2025 Presentation, Analysis

Budget 2025 — Highlights

Taxes in General

1. Fiscal Deficit for FY 2025-26 is estimated @ 4.4% of GDP
2. The net tax receipts are estimated at ₹ 28.37 lakh crore

Income Tax

1. A huge relief is provided to middle class taxpayers by rationalizing the slab rates under New Tax Regime (NTR). It is a very major change in Income Tax

   S.No	Income	Rate of Tax
   1	Up to Rs 4 Lakhs	0%
   2	From Rs 4,00,001 to Rs 8 Lakhs	5%
   3	From Rs 8,00,001 to Rs 12 Lakhs	10%
   4	From Rs 12,00,001 to Rs 16 Lakhs	15%
   5	From Rs 16,00,001 to Rs 20 Lakhs	20%
   6	From Rs 20,00,001 to Rs 24 Lakhs	25%
   7	More than Rs 24 Lakhs	30%

   Refer Latest EZTax Income Tax Calculator to know old vs new tax regime and tax for your income.

2. The Basic Exemption Limit (BEL) under New tax regime (NTR) is increased to Rs 4 Lakhs in New tax regime where there is no change in Old tax regime.
3. The rebate u/s 87A has seen a major change in Budget 2025-26. The rebate has been increased to Rs 60,000 (Rs 80,000 when compared to previous year tax rates).

   However this rebate is only applicable for the taxpayers who are opting for New Tax Regime (NTR). Also the rebate applies only on the normal income and does not apply to special rates of income like capital gains, crypto , lottery etc

4. Rationalization of TDS/TCS provisions are announced in Budget 2025 to bring the uniformity.
   

   Below are the proposed changes in TDS/TCS.

   Section and Nature of Payment	Current TDS Threshold	Proposed TCS Threshold
   193- Interest on Securities	Rs 0	Rs 10,000
   194A - Interest other than Interest on securities	Rs 50,000 for senior citizen	Rs 1,00,000 for Senior citizen
   194 – Dividend	Rs 5,000	Rs 10,000
   194K - Income in respect of units of a mutual fund or specified company or undertaking	Rs 5,000	Rs 10,000
   194B - Winnings from lottery, crossword puzzle etc.	Aggregate of amounts exceeding 10,000/- during the financial year	10,000/- in respect of a single transaction
   194BB - Winnings from horse race	Aggregate of amounts exceeding 10,000/- during the financial year	10,000/- in respect of a single transaction
   194D - Insurance commission	Rs 15,000	Rs 20,000
   194G - Income by way of commission, prize etc. on lottery tickets	Rs 15,000	Rs 20,000
   194H - Commission or brokerage	Rs 15,000	Rs 20,000
   194-I Rent	Rs 2,40,000	(Rs 6,00,000) Rs 50,000 per month or part of month
   194J - Fee for professional or technical services and Royalty	Rs 30,000	Rs 50,000
   194LA - Income by way of enhanced compensation	Rs 2,50,000	Rs 5,00,000
   206C(1G) – Remittance under LRS and overseas tour program package	Rs 7,00,000	Rs 10,00,000

   
   
   1. The TCS rate for timber or any other forest produce (not being tendu leaves) obtained under a forest lease or timber not obtained under a forest lease is proposed to be reduced to 2% from 2.5%
   2. No TCS should be collected on remittances to foreign country if such remittance is out of education loan
5. The time limit for updated income tax returns u/s 139 (8A) is extended to 4 years from the end of relevant assessment year from 2 years. It promotes the voluntary compliance.
   
   The penalties are as follows.
   1. Filed within 12 months from the end of relevant assessment year: Penalty is 25% of aggregate of tax and interest payable on filing of updated return
   2. Filed after 12 months and before 24 months from the end of relevant assessment year: Penalty is 50% of aggregate of tax and interest payable on filing on updated return
   3. Filed after 24 months and before 36 months from the end of relevant assessment year: Penalty is 60% of aggregate of tax and interest payable on filing on updated return
   4. Filed after 36 months and before 48 months from the end of relevant assessment year: Penalty is 70% of aggregate of tax and interest payable on filing on updated return
6. Budget 2025 proposed that there will be an amendment in act which makes the prescribed reporting authority such as broker, intermediary, developer to furnish the information of crypto transactions in a prescribed format.

   The definition of virtual digital asset will align accordingly.

7. Budget 2025 proposed that no TCS will be collected on sale of specified goods of value of more than fifty lakhs.
8. Budget 2025 proposed that section 206AB and section 206CCA of the Act will be omitted and only higher rate of TDS/TCS will be deducted or collected only on non-PAN cases.
9. The Tax benefit u/s 80IAC will be extended to startups for another period of five years, i.e. the benefit will be available to eligible start-ups incorporated before 01st April 2030.
10. The period of validity of registration of trust or institution is increased to 10 years from 5 years for smaller trusts or institutions
11. The withdrawals made from National Savings Scheme (NSS) by individuals on or after the 29th of August, 2024 is exempted from taxation. Similar treatment is available to NPS Vatsala accounts/normal NPS accounts

for NRIs

No Changes or new rules has been notified for NRIs

GST

The GST changes will be brought into effect from a date to be notified in coordination with States, as per recommendations of the GST council

Ease of Doing Business

1. Extension of time limit u/s 80-IAC for startups
2. Parity in rates of long-term capital gain on transfer of securities by non-resident
3. Simplification of tax provisions for charitable trusts/institutions
4. Rationalization in taxation of business trusts.
5. Harmonization of Significant Economic Presence applicability with business connection
6. Bringing clarity in income on redemption of Unit Linked Insurance Policy
7. Exemption from prosecution (de-criminalisation) for delayed payment of TCS.