As the new Assessment Year (AY) 2025–26 approaches, taxpayers, professionals, and businesses must stay informed about the latest updates in Indian taxation laws. The Union Budget 2025 introduced several significant amendments impacting both individuals and corporations. These updates in tax law AY 2025-26 aim to improve compliance, encourage digital transactions, and simplify the tax system.
This article outlines the recent amendments in Indian tax
law, including the latest direct tax changes 2025 and other taxation
law changes 2025 India that you need to be aware of.
Revised Income Tax Slabs Under New Regime
One of the most notable AY 2025-26 tax law updates is
the revision of tax slabs under the new tax regime.
|
Income Range |
Tax Rate |
|
Up to ₹3,00,000 |
0% |
|
₹3,00,001 – ₹6,00,000 |
5% |
|
₹6,00,001 – ₹9,00,000 |
10% |
|
₹9,00,001 – ₹12,00,000 |
15% |
|
₹12,00,001 – ₹15,00,000 |
20% |
|
Above ₹15,00,000 |
30% |
While the old regime remains available, the government continues to incentivise the simplified new regime.
Increased Standard Deduction
The standard deduction for salaried individuals has been
increased from ₹50,000 to ₹75,000 under the new regime. This change is designed
to bring more parity between the two regimes and provide relief to
middle-income earners.
Enhanced Limits for Section 80C and 80D
To promote savings and insurance coverage, the government
has proposed increased deduction limits:
- Section
80C: Enhanced from ₹1.5 lakh to ₹2 lakh
- Section
80D (Health Insurance): From ₹25,000 to ₹40,000 for individuals and
₹50,000 to ₹60,000 for senior citizens
This is part of broader recent amendments in Indian tax
law encouraging financial planning.
Changes in Capital Gains Taxation
One of the latest direct tax changes 2025 involves
changes to capital gains computation:
- Indexation
benefits on debt mutual funds have been removed if held for less than 36
months.
- Taxation
on gains from digital assets like cryptocurrency continues at a flat 30%,
but the threshold for TDS has been increased from ₹10,000 to ₹25,000
annually.
The taxation law changes 2025 India aim to
discourage short-term speculative investing while improving digital asset
tracking.
Presumptive Taxation Limit Raised for MSMEs and Professionals
For small businesses and professionals opting for
presumptive taxation:
- The
turnover limit under Section 44AD has been increased from ₹2 crore to ₹3
crore.
- For
professionals under Section 44ADA, the limit has been raised from ₹50 lakh
to ₹75 lakh.
This change supports ease of doing business for small
taxpayers and reduces their compliance burden with our Tax Expert.
Faceless Assessment Expanded
The scope of faceless assessments has been extended to more
categories of taxpayers, ensuring transparency and reducing harassment.
Taxpayers are now required to respond digitally, with minimal interface with
assessing officers.
TDS/TCS Modifications
New TDS/TCS rates and thresholds have been introduced:
- TCS
on foreign remittances above ₹7 lakh remains at 20%, but education and
medical remittances are now taxed at a reduced 5%.
- TDS
on online gaming winnings continues at 30%, but with enhanced tracking
mechanisms.
These updates in tax law AY 2025-26 reflect the
government’s intent to monitor high-value transactions more effectively.
Mandatory Filing for High-Spenders
A new rule mandates ITR filing for individuals who:
- Spent
more than ₹4 lakh on foreign travel
- Paid
electricity bills above ₹2 lakh annually
- Have
bank deposits exceeding ₹1 crore
This aims to widen the tax base and bring more high-spending
individuals under the tax net.
Final Thoughts
The latest updates in Indian taxation laws for AY
2025–26 reflect the government’s continued focus on widening the tax base,
increasing transparency, and simplifying compliance. Whether you're a salaried
individual, small business owner, or investor, it's crucial to adapt to these Indian
taxation laws 2025–26 and make informed financial decisions.
Staying up to date with the 2025 India taxation law changes ensures you remain compliant and take advantage of available
deductions and benefits.
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