Income Tax Rules: If you pay tax every year, then it is important for you to know the new income tax rules (Income Tax New Rules 2025). Actually, the government has announced many changes in the income tax rules (Income Tax Rule Change), which will come into effect from April 1, 2025. Many of these changes were also announced in the Union Budget 2025 presented in February this year. The government aims to simplify income tax rules for the common man.

Many important changes announced

In Budget 2025, Finance Minister Nirmala Sitharaman had announced several important changes to make the existing tax system simpler and more effective. The new rules will provide great relief to the middle class and the salaried class. These new tax rules are going to be implemented from April 1, which will affect your investment and tax planning. Therefore, you should know about them.

Know about 10 big changes

1. New income tax slab and rates

The latest income tax slab and rates for the financial year 2025-26 under the new tax regime are as follows…

Rs 0 to Rs 4 lakh – zero
Rs 4 lakh to Rs 8 lakh – 5 per cent
Rs 8,00,001 to Rs 12,00,000 – 10 per cent
Rs 12,00,001 to Rs 16,00,000 – 15 per cent
Rs 16,00,001 to Rs 20,00,000 – 20 per cent
Rs 20,00,001 to Rs 24,00,000 – 25%
Above Rs 24,00,000 – 30%
Note that no change has been announced in the Old Tax Regime.

2. Increased exemption under section 87A

The Finance Minister has increased the exemption under section 87A from Rs 25,000 to Rs 60,000 in the budget presented in February. This exemption ensures that no income tax will have to be paid on annual income up to Rs 12 lakh.

3. Changes in TDS rules

From April 1, 2025, the TDS limit has been increased in many sections, which will provide great relief to small taxpayers. The TDS limit on interest income for senior citizens will increase to Rs 1 lakh.

4. Changes in TCS rules

There will also be changes in TCS rates from April 1, 2025, which will affect foreign travel, investments and other transactions. Earlier, TCS had to be paid for sending an amount of more than Rs 7 lakh, but now this limit has been increased to Rs 10 lakh. This rule will greatly benefit those parents who send money abroad for children’s education, family expenses or any other reason.

5. Time limit for updated tax return (ITR-U) increased

Now the time limit for filing updated ITR has been increased from 12 months to 48 months (4 years). If for some reason you miss filing the return, now you will have up to four years to file it.

6. Tax exemption deadline under IFSC extended

The tax exemption deadline under the International Financial Service Center (IFSC) has been extended from March 31, 2025 to March 31, 2030.

7. Tax exemption for startups

Now startups registered till April 1, 2030 will get 100% tax exemption for three years under Section 80-IAC, provided they fulfill all the prescribed conditions.

8. Sections 206AB and 206CCA removed

To make compliance easier, sections 206 AB and 206CCA have been completely removed. Due to which tax deductors and tax collectors will face fewer problems.

9. New limit on salary paid to partner

For partnership firms, a maximum deduction limit has been set on the salary paid to the partner. Along with this, TDS will also be deducted on payment to the partners.

10. ULIP will be taxed as capital gain

Now, if any ULIP policy whose annual premium is more than Rs 2.5 lakh or 10% of the sum assured, then it will be taxed as capital gain. That is, the profit earned from redemption of ULIP policies with annual premium of more than Rs 2.5 lakh will be considered as capital gain and will be taxed. ULIPs held for less than 12 months will be taxed at 20% short-term capital gains (STCG). Whereas ULIPs held for more than 12 months will be taxed at 12.5% ​​long-term capital gains (LTCG).

Will the new rules reduce the tax burden?

These tax changes, which will come into effect from April 1, 2025, can affect your savings, investments and financial planning. Therefore, if you plan for the financial year 2025-26 keeping in mind all these new changes, then you can reduce your tax burden and strengthen your financial position.