Mon Feb 03 05:42:47 UTC 2025: ## India Announces Sweeping Income Tax Cuts in Budget 2025

**New Delhi, February 1, 2025** – Finance Minister Nirmala Sitharaman unveiled a landmark Union Budget 2025-26 today, featuring significant income tax reductions aimed at boosting the middle class and stimulating economic growth. The centerpiece of the changes is the introduction of a “zero” income tax for individuals earning up to ₹12 lakh annually (₹12.75 lakh for salaried individuals including standard deduction).

The new tax regime establishes revised slabs: nil tax up to ₹4 lakh, 5% for income between ₹4-8 lakh, 10% for ₹8-12 lakh, 15% for ₹12-16 lakh, 20% for ₹16-20 lakh, 25% for ₹20-24 lakh, and 30% above ₹24 lakh. A marginal relief provision ensures that those earning slightly above ₹12 lakh don’t face a disproportionately high tax burden.

**Other key tax changes include:**

* **Senior Citizens:** The threshold for tax deducted at source (TDS) on interest earned by senior citizens will be doubled, simplifying compliance.
* **Cryptocurrency:** Stricter crypto taxation is implemented, mandating transaction reporting, classifying crypto gains as undisclosed income (taxed at 30% with 1% TDS per trade), and shortening the assessment timeline for undisclosed income.
* **Overseas Transactions:** The threshold for tax collected at source (TCS) under the Liberalized Remittance Scheme (LRS) is increased to ₹10 lakh. TCS is exempted for education remittances funded through recognized financial institutions.
* **Updated Returns:** The window for filing updated returns is extended to four years.

The budget also proposes amendments to clarify the treatment of employee perquisites, allowing the central government to prescribe limits on tax exemptions for certain benefits.

**Reactions:**

The budget has been met with mixed reactions. While lauded for its simplicity and potential to boost consumer spending, concerns remain about the impact on government revenue and the implications for those relying heavily on tax deductions under the old regime. Experts from various sectors have weighed in, highlighting both the positive impacts on consumption and potential challenges in implementation. The government’s aim is to encourage a shift to the simpler new tax regime.

The overall budget aims to balance fiscal prudence with growth, focusing on critical sectors like exports, infrastructure, and attracting foreign investment. The long-term implications of these significant tax changes will be closely watched.

Read More