PERSONAL TAXES
Points
- Income threshold for rebate under new tax regime enhanced from INR 700,000 to INR1,200,000 (excluding income taxable at special rates e.g. capital gains, etc.)
- Deduction of INR 50,000 made available for contribution towards minor’s National Pension Scheme (Vatsalya) account under old tax regime. Partial withdrawal up to 25 per cent for specified reasons from minor’s account not taxable for parent / guardian.
- The conditions for adoption of nil value for self-occupied property done away with (w.e.f. 01/04/2025).
- The tax rates and slabs under the default (new tax) regime revised as below:
| Existing | Proposed | ||
| Taxable Income (INR) | Tax Rate | Taxable Income (INR) | Tax Rate |
| Up to 3,00,000 | Nil | Up to 4,00,000 | Nil |
| 3,00,001 – 7,00,000 | 5% | 4,00,001 – 8,00,000 | 5% |
| 7,00,001 – 10,00,000 | 10% | 8,00,001 – 12,00,000 | 10% |
| 10,00,001 – 12,00,000 | 15% | 12,00,001 – 16,00,000 | 15% |
| 12,00,001 – 15,00,000 | 20% | 16,00,001 – 20,00,000 | 20% |
| Above 15,00,000 | 30% | 20,00,001 – 24,00,000 | 25% |
| Above 24,00,000 | 30% | ||
- The amount withdrawn from National Savings Scheme (NSS) on or after 29 August 2024 to be exempt from tax.
CORPORATE TAXES
Taxation of non-residents
- A presumptive taxation scheme introduced for non-residents engaged in the business of providing services or technology to a resident company establishing/ operating an electronics manufacturing facility/ connected facility for manufacturing electronic products in India under the government notified scheme.
- A sum equal to 25 percent of the aggregate amount received/ receivable by the non-resident will be deemed to be profits and gains of such non-resident chargeable to tax in India.
TDS & TCS
- Rationalisation of threshold limits [effective 1 April 2025] –
| Sr. No. | Section | Current Threshold
(INR) |
Proposed Threshold (INR) |
| 1 | 193 – Interest on securities (to individual and HUF) –
• From debentures of a company in public are substantially interested • Others |
5,000
Nil (Others) |
10,000
10,000 |
| 2 | 194B – winnings from lottery, crossword puzzle, etc.
194BB – winnings from horse race |
10,000 aggregate during FY | 10,000 per single transaction |
| 3 | 194D – Insurance Commission
194G – Commission, prize, etc. on lottery tickets 194H – Commission or brokerage |
15,000 |
20,000 |
| 4 | 194I – Rent | 2,40,000 in a FY | 50,000 per month or part of month (not applicable on an individual or a Hindu undivided family) |
| 5 | 194J – Fees for professional services, technical services, royalty and sums as per section 28(va) | 30,000 | 50,000 |
| 6 | 194LA – Compensation on compulsory acquisition of certain immovable property | 2,50,000 in a FY | 5,00,000 in a FY |
- The provisions relating to TCS on sale of goods withdrawn w.e.f. 1 April 2025.
- No TCS to apply on remittance made under the Liberalised Remittance (LRS) Scheme for purpose of pursuing education if the remittance is financed by a loan obtained from specified financial institution(s).
- The threshold to apply TCS on remittances under the LRS Scheme and overseas tour program package to be increased from INR 7 lakh to INR 10 lakh.
INCOME TAX RETURN FILING
The timeline to file an updated tax return for any assessment year extended from two to four years from the end of that assessment year. The additional tax payable with such updated tax return to be 60 per cent of the interest and tax liability if filed in the third year and 70 per cent if filed in the fourth year.
GOODS AND SERVICE TAX
- The retrospective amendment from 1 July 2017, in Section 17(5)(d) of the CGST Act proposes to replace the phrase ‘plant or machinery’ with ‘plant and machinery’. An explanation has also been proposed to explicitly mention this amendment is one regardless of any judgment, decree, or order. However, no change/deletion of term “own account” has been proposed in the said Section.
- Additional condition to be complied to reduce tax liability for credit note issued under section 34 of the CGST Act:
– Reversal of input tax credit (ITC) by the recipient, if availed; or
– Confirmation that incidence of tax on such transaction has not been passed on to any other
person, in any other cases
- New Section 148A inserted to provide track and trace mechanism for certain specified goods