New Financial Year, New Rules: Tax Changes That Will Make (or Break) Your Wallet

1. New Income Tax Slabs (New Regime)

• Revised slabs with a highest rate of 30% for income above ₹24 lakh.
• Income up to ₹12 lakh is effectively tax-free under Section 87A (with ITR filing mandatory to claim rebate).

2. Changes in ULIP Taxation

Proceeds from ULIPs not exempt under Section 10(10D) will now be treated as capital assets and taxed as:

• Short-term capital gains (STCG): 20%
• Long-term capital gains (LTCG): 12.5% (without indexation)

Exemption under Section 10(10D) remains for ULIPs with annual premiums up to ₹2.5 lakh.

3. TDS Rationalization

• Section 194LBC TDS rate reduced from 25% (for individuals/HUFs) and 30% (for others) to a flat 10%.
• Threshold limits for various sections (193, 194A, 194K, 194B, etc.) increased to allow more money in taxpayers' hands.

4. Removal of Higher TDS/TCS for Non-Filers

• Sections 206AB & 206CCA (higher TDS/TCS on non-filers) were removed to ease compliance.

5. NPS Vatsalya Contributions - Section 80CCD Deduction

• Deductions allowed under Section 80CCD for NPS Vatsalya contributions, but only under the old tax regime.

6. Tax-Free Perquisites for Medical Treatment Abroad

• Employers' expenditure on foreign medical treatment for employees and family members is tax-free.

7. Simplified Annual Value Calculation for Self-Occupied Properties

• Taxpayers can claim "zero annual value" for up to two self-occupied properties for ease in ITR filing.

8. Exemption from Prosecution for TCS Delay

• Prosecution not applicable if TCS payment is made before the quarterly filing deadline.

9. Extension of Updated ITR Filing Deadline

• Updated ITR filing window extended from 24 months to 48 months from the end of the assessment year.

10. IT Dept to Compare Current and Past ITRs

• From April 1, 2025, IT dept will compare current and past ITRs to detect irregularities.

11. E-Invoicing Compliance for Businesses (GST Rule Update)

• Businesses with Annual Aggregate Turnover (AATO) of ₹10 crore+ must upload e-invoices within 30 days.

12. Banking & Digital Payment Updates

• Positive Pay System: Mandatory cheque verification for transactions above ₹50,000.
• KYC Mandatory: For all mutual fund and demat accounts (including nominee re-verification).
• UPI IDs Unlinked from Inactive Numbers: NPCI to remove UPI IDs linked to mobile numbers inactive for long.

13. GST Updates

• Multi-factor authentication required on the GST portal.
• E-way bills only for documents issued within last 180 days.
• Hotels charging ₹7,500+ per night classified as "Specified Premises" → 18% GST on restaurant services.

14. Tax-Free Income Up to ₹12.75 Lakh for Salaried Professionals

• Standard deduction of ₹75,000 increases tax-free income to ₹12.75 lakh for salaried individuals under New Regime.