Direct Tax Reforms proposed in Budget 2025-26 to achieve Good Governance

Last updated: 01 February 2025

Save Share

Quick Summary

The Union Budget 2025-26 introduces significant direct tax reforms aimed at fostering good governance. Key proposals include personal income tax relief, with no tax payable up to Rs. 12 lakh under the new regime, and increased limits for senior citizens' tax deductions and rent TDS. The budget also seeks to reduce compliance burdens for small charitable trusts and businesses, while enhancing ease of doing business through streamlined transfer pricing and expanded safe harbour rules. Further, it offers tax certainty for electronics manufacturing, extends benefits to inland vessels, and supports the start-up ecosystem.

SLEW OF DIRECT TAX REFORMS PROPOSED IN UNION BUDGET 2025-26 TO ACHIEVE GOOD GOVERNANCE Union Minister for Finance and Corporate Affairs, Smt. Nirmala Sitharaman presented the Union Budget 2025-26, in the Parliament today. A slew of Direct Tax reforms were proposed in the document with the aim to achieve good governance for the people and economy. The objectives of the Direct Tax proposals are as follows Personal Income Tax reforms with special focus on Middle Class: No income tax payable

Daily Limit Reached

You have reached your daily limit of 2 Free News

Subscribe to CCI PRO for unlimited access

Why Upgrade to CCI PRO?

No Ads
WhatsApp Community
Daily E-Newsletter
Unlimited News Access
Profile Visitors
Link Social Profiles
Featured Job Posts
Pro Badge
Expert GST Guidance
Unlimited Forum Replies
Download Content in PDF

1 Year PLAN - Rs.~~1999~~

1799

(Excl. of GST ₹323)

2 Years PLAN - Rs.~~3499~~

3149

(Excl. of GST ₹566)

BEST VALUE

3 Years PLAN - Rs.~~4999~~

4499

(Excl. of GST ₹809)

View all CCI PRO benefits

Already a PRO member? Login here for an ad-free experience. 07941056694

FAQ :

Under the new regime, no income tax will be payable up to a total income of Rs. 12 lakh, which translates to an average monthly income of Rs. 1 lakh, excluding special rate income like capital gains.

The limit for tax deduction on interest for senior citizens is proposed to be doubled from Rs. 50,000 to Rs. 1 lakh.

The annual limit for TDS on rent is proposed to be increased from Rs. 2.40 lakh to Rs. 6 lakh, which will benefit small taxpayers receiving small payments.

The period for registration for small charitable trusts and institutions is proposed to be increased from 5 years to 10 years.

The budget proposes a scheme for determining arm's length price for international transactions over a three-year block period and expands the scope of safe harbour rules to reduce litigation and provide certainty in international taxation.

Yes, the period of incorporation for start-ups is proposed to be extended by 5 years, allowing benefits for those incorporated before April 1, 2030.

429 Views Comment Share Union Budget & Policy Report

News posted by

CCI News Desk

Finance news reporter covering taxation, GST, income tax, business compliance, and economy updates. I simplify complex financial topics into easy-to-understand articles for professionals, taxpayers, and business owners on leading finance and tax platforms.

View News

Comments :