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Rates of Income-tax in respect of income liable to tax for the financial year 2025

Income‑tax Rates – New Regime (Section 115BAC(1A)(iii))

Assessment Year 2026‑27 onwards (FY 2025‑26 onwards)

Taxable Income (₹) Tax Rate
Up to 4,00,000 Nil
4,00,001 – 8,00,000 5%
8,00,001 – 12,00,000 10%
12,00,001 – 16,00,000 15%
16,00,001 – 20,00,000 20%
20,00,001 – 24,00,000 25%
Above 24,00,000 30%

Surcharge: As per slab: 10% (₹50L‑₹1Cr), 15% (₹1‑2Cr), 25% (above ₹2Cr excluding dividend/cap gains), max 15% on capital gains/dividends. (H & E cess @4% applies). :contentReference[oaicite:1]{index=1}

Rebate under Section 87A: Up to ₹25,000 for total income ≤ ₹7 L (AY 2026‑27); up to ₹60,000 for income ≤ ₹12 L from AY 2027‑28 onwards :contentReference[oaicite:2]{index=2}.

Old Regime Tax Rates (unchanged for AY 2025‑26)

Tax slabs based on age as per First Schedule remain unchanged. No revisions announced for old regime. :contentReference[oaicite:3]{index=3}

TDS / TCS Amendments (Effective 1 April 2025)

Provision Existing Rate / Threshold Proposed Rate / Threshold
Section 194LBC (securitization trust) 25% (Ind/HUF), 30% (others) 10%
Section 206C(1)(i)/(ii) – timber etc. 2.5% 2%
Section 206C(1G) – LRS remittance for education 0.5% above ₹7L Nil
Section 194A – Interest (senior citizens) ₹50,000 ₹1,00,000
Section 194A – Interest (others) ₹40,000/₹5,000 ₹50,000/₹10,000
Section 194 (Dividend income) ₹5,000 ₹10,000
Section 194K (Mutual fund) ₹5,000 ₹10,000
Section 194B/C/BB/D/H/I/J/LA ₹10,000‑₹2,50,000 varies Thresholds raised (₹20,000‑₹5,00,000 as applicable)

Section 206C(1H) deleted; Section 206AB & 206CCA omitted. Prosecution under Section 276BB waived if TCS paid before quarterly statement date :contentReference[oaicite:4]{index=4}.

Other Key Amendments (Various Effective Dates)

Extended time‑limit for filing updated return (Sec 139(8A)): Up to 48 months instead of 24 months from end of relevant AY :contentReference[oaicite:5]{index=5}.

Presumptive tax for non-residents (Sec 44BBD): 25% on aggregate receipts/profits for technology/services to Indian company (from 01‑04‑2026).

MSME criteria revised: Micro: Investment ₹2.5Cr / Turnover ₹10Cr; Small: ₹25Cr / ₹100Cr; Medium: ₹125Cr / ₹500Cr (from 01‑04‑2025).

Several rationalisations: section 13(3) contribution limits, section 115UA inclusion of Sec 112/112A, clarification of economic presence under section 9, capital assets definition under 2(14), ULIP redemption taxation, loss carry‑forward limit under sections 72A/72AA, extended timelines under Chapter XIV‑B, penalty time‑limits under Sec 275, etc.

Deduction under Section 80CCD extended to NPS Vatsalya contributor for minors; NSS withdrawals exempted under Section 80CCA; self‑occupied property annual value rules simplified; certain penalties shifted to Assessing Officer; IFSC insurance proceeds exempted under Sec 10(10D) etc.

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