• Source:JND
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In a major relief to the middle class, Finance Minister Nirmala Sitharaman, during her Budget 2025 speech announced that people earning up to Rs 12 lakhs per annum will have to pay no tax. She also said that the New Taxation Policy will be tabled in the upcoming week, targeting to make the taxation system more smooth and progressive.

While elaborating on the new announcement, FM Sitharaman stated that all income groups will benefit from the new tax structure. "Slabs and rates are being adjusted across the board to benefit all taxpayers. This new structure will significantly reduce taxes for the middle class, putting more money in their hands, boosting household consumption, savings, and investment," FM Sitharaman said in her speech.

With the introduction of the new tax structure, here are 10 changes that individual taxpayers should know about:

- The individuals earning an income of Rs 25 lakh per annum will be able to save as much as Rs 1.10 lakh in taxes with the introduction of the new tax structure of the financial year 2025-26.

- The government has decided to enhance the tax rebate from Rs 25,000 to Rs 60,000. However, this will be applicable only for people availing the new tax regime, and it is not applicable for NRIs.

- The individuals can now claim that they occupy two houses, whether they live in them or not. Earlier, an individual could claim two houses as self-occupied only if they lived in them or couldn’t stay in one because their place of work was elsewhere.

- The government has also decided to increase Tax Collected at Source (TCS) on overseas remittances under the Liberalised Remittance Scheme (LRS) from 7 lakh to 10 lakh.

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- Apart from this, the government also announced that TCS will also not be applicable to remittances made for educational expenses. Earlier, the TCS on this was applicable at 0.5% on remittance over 7 lakh.

- FM Sitharaman also said that the time limit to file the updated tax return will increase from the existing 24 months to 48 months. However, it will come with stiff additional tax and interest aggregating to 70 percent.

- The government announced that the tax deduction (under the old tax regime) for own contributions to the National Pension System (NPS) of 50,000 has been extended to contributions made in the name of minors under the NPS Vatsalya scheme.

- The TDS on interest income for taxpayers, except senior citizens, has been increased to 50,000 from 40,000 for interest from deposits from banks. The government clarified that the limit for senior citizens will be increased from the present limit of 50,000 to 1 lakh.

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- FM Sitharaman also announced that the threshold limit of 2.4 lakh per annum for corporate tenants (non-individuals) has been increased to 50,000 per month.

- The government also announced that the threshold limit of TDS on dividend income and income from mutual fund units has been increased from 5,000 to 10,000.