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 ac
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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.