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1. No Tax on Income up to ₹12 Lakh
Individuals earning up to ₹12 lakh annually will pay zero income tax under the new regime. For salaried individuals, this limit extends to ₹12.75 lakh, factoring in the ₹75,000 standard deduction.
2. Revised Income Tax Slabs
The new tax slabs simplify taxation:
- ₹0–₹4 lakh: 0%
- ₹4–₹8 lakh: 5%
- ₹8–₹12 lakh: 10%
- ₹12–₹16 lakh: 15%
- ₹16–₹20 lakh: 20%
- ₹20–₹24 lakh: 25%
- Above ₹24 lakh: 30%
3. Higher Standard Deduction
Salaried employees now enjoy a standard deduction of ₹75,000, up from ₹50,000, reducing taxable income.
4. Changes in ULIP Taxation
Proceeds from Unit Linked Insurance Plans (ULIPs) with annual premiums exceeding ₹2.5 lakh will now be taxed as capital gains.
5. TDS Thresholds Revised
The Tax Deducted at Source (TDS) exemption limit for senior citizens on interest income has increased to ₹1 lakh. For others, the limit is ₹50,000.
6. Enhanced Benefits for Senior Citizens
Senior citizens benefit from higher TDS exemption limits and simplified tax filing processes.
7. Tax on Crypto Gains
Income from cryptocurrency transactions will be taxed under the new provisions, ensuring compliance.
8. Home Loan Borrower Relief
Borrowers can now avail higher loan limits under Priority Sector Lending: ₹50 lakh in metro cities, ₹45 lakh in Tier-2 cities, and ₹35 lakh in smaller cities.
9. Changes in TCS Rules
The Tax Collected at Source (TCS) threshold for foreign travel and large transactions has increased from ₹7 lakh to ₹10 lakh.
10. Simplified Exemptions
Certain exemptions have been streamlined to make tax filing more straightforward and transparent.
11. Focus on Transparency and Simplification
The overarching goal of these reforms is to make the tax regime more equitable, transparent, and user-friendly.
