The Union Budget 2025, presented by Finance Minister Nirmala Sitharaman on February 1, 2025, introduced significant reforms in both direct and indirect taxation to stimulate economic growth and provide relief to taxpayers. File income tax return in just a few clicks!

Direct Tax Reforms:

•Income Tax Exemption Limit Increased: The exemption threshold under the new tax regime has been raised from ₹7 lakh to ₹12 lakh, offering substantial relief to middle-class taxpayers.

•Revised Tax Slabs: The updated tax structure is as follows:

1.Income up to ₹12 lakh: Nil

2.₹12 lakh to ₹15 lakh: 10%

3.₹15 lakh to ₹20 lakh: 15%

4.₹20 lakh to ₹25 lakh: 20%

5.Above ₹25 lakh: 30%

• TDS and TCS Adjustments: The limit for Tax Deducted at Source (TDS) on interest for senior citizens has been doubled from ₹50,000 to ₹1 lakh. Additionally, the annual limit for TDS on rent has increased from ₹2.4 lakh to ₹6 lakh.

• Tax Exemption on NSS Withdrawals: Withdrawals from the National Savings Scheme made on or after August 29, 2024, are now exempt from tax.

• Extended Time-Limit for Filing Income Tax Returns: The time frame to file updated returns has been extended from two years to four years, providing taxpayers with greater flexibility.

Indirect Tax Reforms:

• Incentives for Electronics and Electric Vehicles (EVs): Exemptions have been granted for components such as open cells for LED/LCD TVs, looms for textiles, and capital goods for lithium-ion batteries used in mobile phones and EVs, promoting domestic manufacturing.

• Promotion of Maintenance, Repair, and Overhaul (MRO): A 10-year exemption on goods for shipbuilding and ship-breaking has been introduced, along with an extension of the time limit for exporting railway goods imported for repairs.

• Trade Facilitation Measures: The budget sets a time limit for the finalization of provisional assessments, introduces provisions for voluntary declaration of material facts post-clearance with duty payment and interest but without penalty, and amends IGCR Rules to extend the time limit to one year with a shift from monthly to quarterly statements.

These comprehensive tax reforms aim to increase disposable income for individuals, stimulate consumer demand, encourage domestic manufacturing, and simplify compliance procedures, thereby fostering economic growth. Start your business journey today – register your private limited company now!