The Budget 2025 introduced some major changes to the Income Tax Act 1961 to simplify the tax structure in India. These changes will come into effect on 1 April 2025 and will be relevant from FY 2025-26 onwards. This article will cover all major changes that one must be familiar with to plan one's finances for FY 2025-26 accordingly.Major Income Tax Changes from 1st AprilIncome Tax Slab Rates Under The New Tax Regime The Budget 2025 proposed revised tax slab rates under section 115BAC i.e., the New Tax Regime or the Default Tax Regime. This was to ensure that individuals save more and increase their spending capacity. These revised tax slab rates will be applicable for income earned in FY 2025-26 onwards.The new slab rates for FY 2025-26 are as follows:Income Tax SlabsTax RateUpto Rs. 4,00,000NILRs.

Income tax is a direct tax which follows a progressive slab system, where tax rates increase with higher income. The taxpayers can choose between the old regime, which offers deductions and exemptions, and the new regime, which offers lower tax rates but without deductions and exemptions. In this article, we will explore the different slabs under both the old and new regimes and help you understand which one is more beneficial for you.Income Tax Slabs for FY 2025-26 (AY 2026-27)Under the Budget 2025, individuals with income up to Rs. 12,00,000 will have zero tax liability for FY 2025-26 (AY 2026-27) under the new tax regime. The revised tax slabs are as follows:Income Tax SlabsIncome Tax RatesUpto Rs.4 lakhNILRs.

The government, in order to encourage reinvestment of the capital gains made on the sale of capital assets by the seller, has provided with exemptions from capital gains tax if such capital gain is re-invested in certain specified assets within a specified time limit under section 54 to 54GB.There may be instances where the taxpayer is unable to re-invest the capital gains in modes as specified in the Act before the filing of return of income. To address this, in order to enable the taxpayer to park his funds till they are invested for the prescribed purpose, the concept of Capital Gains Account Scheme(CGAS) was introduced.What is Capital Gains Account Scheme?Capital Gains Account Scheme was introduced in 1988 by the Central Government.As mentioned above, the time required by the depositor for re-investment and avail the exemption on Long Term Capital Gains, in many cases is longer than the due date to file the return of income. In such cases, the taxpayer is given an option of depositing such under-utilized capital gains in ‘Capital Gains Account’ introduced under Capital Gains Account Scheme.Any capital gain invested in Capital Gains Account Scheme will be eligible for capital gain exemption as it would in case of re-investment. It is to be noted that since Short Term Capital Gains are not eligible for exemptions under section 54 series, deposit under Capital Gains Account Scheme is irrelevant in case of Short Term Capital Gains.Who Can Deposit in Capital Gains Account Scheme?Category of the taxpayer with capital gains who is eligible to invest in CGAS from Section 54 to 54F of the Income-tax Act, 1961 is provided below:Section NumberCapital Gains made onCategory of person54Sale of residential houseIndividual or HUF54BSale of land used for agricultural purposeIndividual or HUF54DCompulsory acquisition of land and buildingAny taxpayer54ESale of any long term capital assetAny taxpayer54ECSale of long term capital asset being land or building or bothAny taxpayer54FSale of any long term capital asset not being residential propertyIndividual or HUF54GTransfer of asset (machinery, plant or building, land or right in land or building) in case of shifting of industrial undertaking from urban areaAny taxpayer54GATransfer of asset/s (machinery, plant or building, land or right in land or building) in case of shifting of industrial undertaking from urban area to Special Economic ZoneAny taxpayer54GBTransfer of residential propertyAny taxpayerWhen Can One Deposit in Capital Gains Account Scheme?The taxpayer should invest the amount in the CGAS within the earlier dates of the following.The due date of filing the return on income (For individuals and HUF - due date is 31st July of the next financial year).The date of filing of return of the assessee.Lets understand this time limit using an example:Mr. A has opted for exemption under section 54F for FY 2024-25. He wants to purchase the property for Rs.

We all know that income from salary, rental income and business income is taxable. But what about income from the sale or purchase of shares? Many homemakers and retired people spend their time gainfully buying and selling shares but are unsure how this income is taxed. Income/loss from the sale of equity shares is covered under the head ‘Capital Gains’.Such income is taxed at special rates based on the nature of the investment and not at the usual slab rates. Further, losses can be set off and carried forward for a period of 8 years. However, certain rules and conditions need to be followed.

Have you ever seen how many people flaunt themselves by wearing kilos of gold on their bodies? You must have seen them and wondered whether it is allowed to hold such an amount of gold. You may also be plagued with different questions about investing in gold, like should I disclose the investment made in gold? What are the precautions I need to take from a tax perspective? All these questions assume importance given the government’s recent thrust on tracking unaccounted monies and investments. Read on to know more details.People purchase gold for various reasons, whether for auspicious occasions, a love of wearing ornaments, or as an investment. Here, gold does not only mean jewellery; it also includes gold coins, gold bars, and other forms.Is There any Limit for Holding Gold Jewellery and Ornaments?The first point to remember is that there is no restriction on possessing gold jewellery or ornaments, provided they are obtained from a legitimate income source and the taxpayer can explain the source. This source includes gold acquired from inheritance as well.Gold is seen as a safe investment option and hence preferred by most.

Income Tax allows exemption on the long term capital gain if you invest the gains/consideration in a new residential property subject to certain conditions. Recently, the Income Tax Appellate Tribunal (ITAT) Delhi has allowed multiple-year exemption u/s 54F for an under-construction house. It held that taxpayer can invest capital gains for the second or third time also towards the same new house property.Section 54FSection 54F of the IT Act allows an exemption on capital gain from the sale of any property other than a residential house. This exemption is subject to certain conditions, which are:Taxpayer should invest the net sales amount of the old asset in purchase of a new residential house.The new residential property must be:Purchased: either 1 year before or 2 years after the sale of asset Or Constructed: within 3 years of sale of old assetTaxpayer should not own more than one residential house on the date of sale, other than the one bought for claiming exemption under this section.Taxpayer should not purchase any other house within 2 years or construct within 3 years from the date of transfer.If the above conditions are not satisfied, then exempt Capital Gains taxable in the year in which such other residential house is purchased/ constructed.The maximum deduction u/s 54F is capped at Rs.10 crore. This shall be effective from 1st April 2024.How to Calculate Exemption u/s 54F?Exemption u/s 54F is available to the amount invested proportionate amount of sales consideration.

If you've missed the deadline to file your income tax returns, there's no need to panic. You still have the option to file your tax returns after the due date, although with a penalty. This article provides a comprehensive guide on understanding and filing belated returns, ensuring you navigate the process smoothly while avoiding potential financial penalties. What is a Belated Return?A belated return is a return filed after the deadline i.e. 31st July of the next financial year but before 31st December of the next financial year. While late filing has consequences, it's still better than facing potential penalties for non-compliance.The due date to file income tax return for the Financial Year 2024-25 is 31st July 2025.

The purpose of the Public Provident Fund (PPF), which was first implemented in India in 1968, was to mobilise small contributions for investment and return. It can also be referred to as an investment vehicle that enables one to accumulate retirement funds while reducing yearly taxes. Anyone looking for a safe investment option to save taxes and earn guaranteed returns should open a PPF account.What is PPF Account?Public Provident Fund (PPF) scheme is a long-term investment option that offers an attractive rate of interest and returns on the amount invested. The interest earned and the returns are not taxable under Income Tax. One has to open a PPF account under this scheme and the amount deposited during a year will be claimed under section 80C deductions.PPF Key InformationAny person wanting to invest in PPF can start with a minimum investment of Rs.

Have you already filed your returns and are now waiting for a refund? Read on to learn about the refund process, the usual time it takes, how to check your refund status, and what to do if it's taking longer than expected.What is Income Tax Refund?An Income Tax Refund is issued by the Income Tax Department if a taxpayer has paid more income tax than was due for the financial year.Normally, the tax is paid by the assessee at the time of filing returns after he assessess the tax liability by himself. This is the concept of Self-Assessment.But the actual tax liability and the tax amount paid may not be the same in all the cases due to a few factors.Income Tax Refund = Total Taxes paid – Total Tax Liability How does a Refund Situation Arise? Tax payment not only occurs at the time of filing the returns. It also occurs during the year when When the payer deducts TDS amount and directly pays it to government or When Advance tax is paid as per provisions of the act . In some cases, an income tax refund can also arise in case the tax liability is reduced by claiming deductions, exemptions, set off of losses, or tax credits while filing the income tax return.Is There Interest on Refund in case of Delay in Refund Processing?Post-filing, the Income Tax Authorities assess the taxpayer's tax liability. In case the tax liability assessed exceeds the amount paid, the excess tax paid is refunded to the taxpayer along with interest at 0.5% per month or part of the month (i.e. 6% per annum) until the date of refund.Income Tax Refund - An IllustrationOn 1st April, 2024, Mr.

The direct tax code (DTC)  will be aimed at simplifying and modernising the existing direct tax law i.e. the Income-tax Act, 1961. The DTC will also be in-line with the global standards making the taxation simpler for both residents and non-resident taxpayers. In this article, we will explain in detail the expectations and differences between the DTC and the Income-tax Act.Budget 2025 UpdatePost budget, the bill has been approved by the cabinet. The bill is now likely to be presented in the parliament within the ongoing parliamentary session.