Good news for everyone. The new financial year will commence on April 1st, bringing with it a host of changes aimed at benefiting the general public. This includes individuals who earn income through renting out properties such as houses, offices, or shops. Let’s explore how these benefits will be realized.
On February 1, Union Finance Minister Nirmala Sitharaman unveiled the budget for the financial year 2025-26, which included a significant increase in the annual limit for TDS on rent from Rs 2.40 lakh to Rs 6 lakh. This adjustment will provide relief to those who rely on rental income, effective from April 1.
Additional changes are also on the horizon. The deadline for individuals to file updated income tax returns (ITR) has been extended to four years. This option is available for taxpayers who were unable to report their accurate income within the original timeframe. Previously, such returns could only be filed within two years of the relevant tax assessment year. Approximately 90 lakh taxpayers have already taken advantage of this by voluntarily updating their income details and paying the necessary additional tax.
Moreover, the tax deduction limit on interest income for senior citizens has been increased from Rs 50,000 to Rs 1 lakh. Additionally, the threshold for collecting TCS on remittances under the Reserve Bank’s liberalized remittance scheme (LRS) has risen from Rs 7 lakh to Rs 10 lakh. Notably, TCS will be exempt for educational remittances funded by loans from specified financial institutions.
The budget for the financial year 2025-26 also aims to ease the tax burden on the middle class by restructuring tax slabs. Under the new income tax framework, individuals with an annual income of up to Rs 12 lakh will be exempt from income tax. When factoring in the standard deduction for salaried taxpayers, this income threshold effectively rises to Rs 12.75 lakh.