Budget 2025: Higher Tax Exemptions, and startup boost in new tax reforms

The Finance Minister has announced a major relief to individual taxpayers by increasing the exemption limit for personal income-tax, and other tax reforms for startups. Some of the major announcements are as under:

1. Higher Tax Exemption: The Finance Minister stated that there will be no income-tax for individuals earning up to ₹12 Lakh annually. New Tax slabs has been announced.
2. The new tax reform emphazies on easing the burden on the middle-income group.
3. The time limit for filing updated tax returns has been extended to 4 years from 2 years.
4. In a major relief, the taxpayers can now declare the value of two self-occupied properties as NIL.
5. To reduce international tax litigation, the FM has announced expansion of safe harbor rules.
6. The period of incorporation for startups to avail tax benefits has been increased to eight years.

New Tax Slabs

• Up to Rs 4 lakh – No tax
• Rs 4 lakh – Rs 8 lakh – 5%
• Rs 8 lakh – Rs 12 lakh – 12%
• Rs 12 lakh – Rs 16 lakh – 15%
• Rs 16 lakh – Rs 20 lakh – 20%
• Rs 20 lakh – Rs 24 lakh – 25%
• Above Rs 24 lakh – 30%

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