2025 Tax Rule Changes Every Indian Taxpayer Must Know

By | January 25, 2025

The Union Budget 2024 has introduced crucial updates to income tax rules. These changes will affect how you file ITR in 2025. Here are the five key updates every taxpayer should note.

1. Lower Tax Rates on High Incomes

The new income tax slabs offer significant savings for higher earners:

Income Range (₹)Old Tax RateNew Tax Rate
Above ₹12,00,00030%25%

This adjustment reduces the tax burden for those earning above ₹12,00,000 annually.

2. Revised Capital Gains Tax Rates

Investors face updated tax rates on short- and long-term capital gains:

Type of Capital GainOld Tax RateNew Tax Rate
Short-Term (Equity/Mutuals)15%20%
Long-Term (All Assets)10%12.5%

The exemption limit for LTCG has also increased from ₹1 lakh to ₹1.25 lakh, providing relief to investors.

3. Updated Standard Deductions for Salaried and Pensioners

CategoryOld Limit (₹)New Limit (₹)
Salaried Individuals50,00075,000
Family Pensioners15,00025,000

Higher deductions reduce taxable income, enhancing savings for taxpayers.

Did You Know?

India has some of the lowest long-term capital gains tax rates among major economies, even after recent increases.

Final Word

These tax reforms are designed to simplify compliance and promote savings. Stay informed to make the most of the changes. Start planning your 2025 finances now!