Union Budget 2025: Key Tax Announcements by Nirmala Sitharaman

Union Budget 2025: Finance Minister Nirmala Sitharaman presented the Union Budget 2025 on Saturday, bringing several tax-related changes aimed at easing compliance and providing relief to taxpayers.

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TDS on Rent Increased to Rs.6 Lakh

One of the major announcements was the increase in the annual limit for Tax Deducted at Source (TDS) on rent from Rs.2.40 lakh to Rs.6 lakh. This move is expected to benefit landlords and tenants by reducing the burden of frequent tax deductions.

Updated Return Filing Period Extended

The time limit for filing updated income tax returns has been extended from two years to four years, giving taxpayers more flexibility to correct their filings.

TCS Exemption for Education Remittances

The Tax Collected at Source (TCS) exemption has been proposed for education-related remittances, provided the education loan is taken from specified financial institutions. This will benefit students and parents who send money abroad for education purposes.

Tax Deduction on Interest Income for Senior Citizens

Senior citizens will now get double the tax deduction on interest income, with the limit increased to ₹1 lakh. This is aimed at providing financial relief to retirees who rely on interest earnings.

Tax Benefits for Startups Extended

The government has also extended the period of incorporation for startups by five more years, allowing them to continue availing tax benefits.

New Income Tax Bill Coming Soon

Sitharaman announced that a new Income Tax (I-T) bill will be introduced in Parliament next week. She emphasized that the bill will be half the volume of the current one, making it simpler, clearer, and more direct.

Vivad Se Vishwas 2.0 Scheme Update

She revealed that 33,000 taxpayers have settled their direct tax disputes under the Vivad Se Vishwas 2.0 scheme.

With these announcements, the government aims to simplify taxation, reduce compliance burdens, and provide relief to different taxpayer segments.

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