Upcoming Tax Changes in India 2025: What You Require to Know

Posted on February 25, 2025 by Sudip

Upcoming Tax Changes in India 2025: As 2025 approaches, tax arrangements in India are set for a few major corrections. For businesses, salaried people, and speculators alike, these changes may bring noteworthy shifts in your monetary arrangement.

In this web journal, we’ll investigate the best upcoming tax changes in India in 2025, what they are cruel to you, and how to remain ahead of them. So, are you prepared to get these tax shifts?

1. Unused Tax Slabs and Rates: What to Anticipate in 2025

The Indian government has signalled that the salary Tax system will be changed in 2025. This is anticipated to help middle-income groups and lower the tax burden for numerous salaried experts. For example, the modern Tax system may increase the exclusion constraint, making more individuals qualified for lower rates or zero taxes.

Also Read, Effects of Income Tax Slabs changes for FY 2025-26: Rates & Ultimate Breakdowns

Example

If the current Tax pieces see a 5% lessening for earnings up to ₹5 lakh, it might cruel an investment fund of ₹25,000 for those in this bracket. These changes, whereas not last, are planned to empower financial development by moving forward expendable income.

Learn more about income tax changes on the official Government of India website.

2. Changes to Corporate Tax collection: What Businesses Require to Know

Upcoming Tax Changes in India 2025 - Changes to Corporate Tax collection: What Businesses Require to Know

For businesses, 2025 will bring significant adjustments to corporate charge rates and compliance prerequisites. Unused recommendations are being discussed to streamline corporate charges, centring on ease of doing business. Also, the government may present unused charge credits to advance fabricating and exports.

Example

A diminished Tax rate for new companies or small businesses seems to provide a much-needed cash stream, especially for those contributing to innovation or green energy. Visit the Department for Promotion of Industry and Internal Trade (DPIIT) for more on startup support: DPIIT official website.

3. GST Changes: The Street to Disentangled Taxation

Indian citizens are acclimated to the Goods and Service Tax (GST) framework, but 2025 will present a few alterations aimed at rearranging GST filings. A move towards computerized GST preparation may help diminish manual mistakes, ease the compliance burden, and guarantee quicker refunds.

Explanation

Under the proposed alternate, businesses may face lessened GST compliance costs and speedier turnover of input assess credits, which can lead to smoother cash stream administration.

Stay updated on GST reform details by visiting the GST Council website.

4. The Computerized Tax and Crypto Control in India

With cryptocurrency exchanges on the rise, India is anticipated to present modern Tax laws focusing on advanced resources. These incorporate charges on computerized monetary standards, NFTs (Non-Fungible Tokens), and other blockchain-based resources. Tax collection on crypto picks-up runs from 10% to 30%, depending on the nature of the transaction.

Example

Investors in crypto are required to be ready to charge higher liabilities when they exchange or offer these resources. If you’ve earned picks up in crypto, it’s crucial to remain overhauled on the particular rules post-2025.

For more on cryptocurrency tax regulations in India, visit the Reserve Bank of India’s official website: RBI on Crypto.

5. Changes to tax Conclusions: Maximizing Your Tax Savings

The modern charge administration in India for 2025 might incorporate changes to accessible charge findings. For case, Tax findings beneath areas 80C and 80D may be recalibrated, influencing how much one can spare on protection premiums, speculations, and instruction costs. These modifications may make you more adaptable in overseeing your taxes.

Example

Taxpayers may be able to contribute to unused government plans advertising higher findings. Be beyond any doubt to survey your qualifications for these overhauled choices in 2025.

Also, Read for minimized for you Tax Liabilities – 10 Hidden Tax Deductions: Can Save You Big!

For further information on tax-saving investments, check out the National Securities Depository Limited (NSDL) website: NSDL Tax-Saving Schemes.

6. Key Takeaways for Taxpayers

Preparing for the upcoming tax changes in India in 2025 is fundamental to maintaining a strategic distance from any last-minute shocks. Here are a few things you can do:
Track wage charge modifications and alter your tax arrangements accordingly.
Consult a charge advisor about how the unused GST changes might affect your business.
Stay upgraded on the controls around crypto and computerized assets.
Review your speculation portfolio to optimize tax-saving openings.

Learn more about tax planning and savings strategies at the Income Tax Department’s website.

FAQs: Upcoming Tax Changes in India 2025

Answering Your Key Tax Queries

Q1. What are the new tax slabs for 2025 in India?

A1. The government is proposing new tax slabs and an increase in exemptions, which could reduce the tax burden on the middle class.

Q2. How will GST reforms affect small businesses?

A2. The upcoming GST reforms aim to reduce compliance burdens and offer quicker input tax credit refunds for small businesses. Explore more about GST reforms through GST India.

Q3. What changes will be made to corporate tax rates?

A3. Corporate tax rates may be reduced to incentivize new businesses and export-oriented industries. Get more information on corporate tax reforms from the Ministry of Finance.

Q4. Will cryptocurrency be taxed in India in 2025?

A4. Yes, the government is planning to implement digital asset taxation, including gains from cryptocurrencies and NFTs. Stay updated on cryptocurrency taxation at the Government of India – Finance Ministry.

Q5. What tax deductions can I claim in 2025?

A5. Taxpayers may see revisions in tax-saving options under sections like 80C, 80D, and others, so it’s important to review available deductions. Learn more about tax-saving options at Income Tax India.

Q6. How will tax changes in 2025 affect salaried employees?

A6. Salaried employees may see reduced tax rates and new exemptions, helping to increase disposable income. Check out tax-saving investments at NSDL: NSDL Tax Saving.

Conclusion: Upcoming Tax Changes in India 2025

The upcoming tax changes in 2025 will be a critical move in the Indian charge scene. Whether you’re a salaried person, commerce proprietor, or financial specialist, remaining educated about these changes is significant. Keep a close eye on modern charge chunks, GST changes, and advanced resource controls to guarantee you make the most of the upcoming changes. Audit your charge procedure, counsel with specialists, and remain arranged!

For detailed information on tax planning, visit the official Income Tax Department site: Income Tax India.

Sudip

I am Sudip Sengupta, the founder of Tax Orbit, a finance and consulting firm dedicated to simplifying complex tax and financial concepts for individuals and businesses. With over 23 years of experience, I have witnessed how challenging financial decisions can be, which inspired me to create Tax Orbit. My mission is to empower clients with the knowledge they need to make informed choices. Additionally, I run Tfin Career, a USA-based blog offering finance and taxation career guidance, and I’m launching a training module to help aspiring professionals thrive in the field.

A Vision for Growth: Indian Budget 2025’s Focus on Innovation and Sustainability

Posted on February 20, 2025 by Sudip

The Indian Budget 2025 has presented a few activities aimed at fortifying development over different divisions centered on supportability, advancement, and inclusivity. Here are the key highlights from the budget, along with brief clarifications:

1. A National Manufacturing Mission Covering Small, Medium and Large Industries for Furthering “Make in India”

A new initiative to strengthen the “Make in India” campaign. The mission will focus on upgrading manufacturing across industries, from small enterprises to large corporations, driving innovation, and improving self-reliance in production.

2. Benefitting 1.7 Crore Farmers, ‘Prime Minister Dhan-Dhaanya Krishi Yojana‘ to Cover 100 Low Agricultural Productivity Districts

This plot points to elevating the agrarian segment by supporting 1.7 crore agriculturists in a locale with moo rural efficiency, moving forward to get to assets, innovation, and advertise openings.

3. Budget 2025 Estimated to End with Fiscal Deficit of 4.8%, Target to Bring It Down to 4.4% in FY-26

The government plans to decrease the financial shortage from an assessed 4.8% in FY-25 to 4.4% in FY-26, exhibiting a commitment to budgetary teaching and feasible financial development.

4. Loans Up to Rs. 5 Lakhs Through KCC Under Modified Interest Subvention Scheme

To improve farmers’ credit access, the government has expanded the Kisan Credit Card (KCC) scheme, offering loans up to Rs. 5 lakhs with reduced interest rates to help farmers with cultivation expenses.

5. Mission for Aatmanirbharta in Pulses” with a Special Focus on Tur, Urad, and Masoor to be Launched

This mission focuses on boosting domestic pulse production, particularly Tur, Urad, and Masoor, reducing reliance on imports, and improving food security.

6. No Income Tax on Average Monthly Income of Up to Rs. 1 Lakh To Boost Middle-Class Household Savings & Consumption

To promote financial well-being, the government has raised the tax privilege limit to Rs. 1 lakh per month, enabling middle-class families to save and spend more, stimulating domestic demand.

7. Salaried Class to Pay Nil Income Tax Up to ₹12.75 Lakhs Per Annum in New Tax Regime

The new tax regime provides salaried individuals with a tax-free income up to ₹12.75 lakh, reducing the tax burden and increasing disposable income for the middle class.

Know More – Income Tax Slabs for FY 2025-26: Rates & Ultimate Breakdowns

8. Significant Enhancement of Credit with Guarantee Cover to MSMEs from ₹5 Cr to ₹10 Cr

The credit guarantee cover has been increased to support MSMEs, allowing businesses to access up to ₹10 crore in loans, fostering growth and innovation in this sector.

9. Union Budget Recognises 4 Engines of Development – Agriculture, MSME, Investment and Exports

The budget distinguishes four key areas—agriculture, MSME, speculation, and exports—essential for driving maintainable development and advancing financial strength.

10. ₹1 Lakh Crore Urban Challenge Fund for ‘Smart Cities Mission as Growth Hubs’

This fund aims to develop cities into hubs of economic growth, focusing on urban infrastructure, smart cities, and improved living conditions to drive urban development.

11. ₹15,000 Crore SWAMIH Fund to Be Established for Expeditious Completion of Another 1 Lakh Stressed Housing Units

The SWAMIH Fund will speed up the completion of stressed housing projects, benefiting the real estate sector and contributing to affordable housing for millions.

12. ₹20,000 Crore Allocated for Private Sector-Driven Research, Development, and Innovation Initiatives

The budget provides noteworthy financing for research and development, empowering private sector interest in R&D, which is fundamental for mechanical progression and financial growth.

13. 50,000 Atal Tinkering Labs in Government Schools in the Next 5 Years

The foundation of 50,000 Atal Tinkering Labs points to cultivating development and inventiveness among understudies by giving them instruments to investigate science, innovation, building, and arithmetic (STEM).

14. BCD Exempted for 10 Years on Raw Materials & Components Used for Ship Building

The exception of Essential Traditions Obligation (BCD) on crude materials and components utilized in shipbuilding for ten years points to boosting the sea industry and improving India’s shipbuilding capabilities.

15. BCD Exempted for 10 Years on Raw Materials & Components Used for Ship Building

As mentioned in the previous point, this exemption will support long-term growth in the shipbuilding sector by lowering shipbuilders’ operational costs.

16. BCD Exempted on 36 Lifesaving Drugs and Medicines for Treating Cancer, Rare and Chronic Diseases

To enhance accessibility to essential healthcare, the government has exempted BCD on 36 lifesaving drugs, including those for cancer and chronic diseases, reducing the cost of treatment for patients.

17. BCD on IFPD Increased to 20% and on Open Cells Reduced to 5%

The budget proposes increasing BCD on Integrated Food Processing Devices (IFPD) to 20% while reducing it on open cells to 5%, aimed at supporting local manufacturers.

18. BCD on Parts of Open Cells Exempted to Promote Domestic Manufacturing

Exemptions on BCD for certain parts of open cells are intended to boost the local manufacturing of electronic components and encourage self-reliance in the electronics sector.

19. BCD Reduced from 30% to 5% on Frozen Fish Paste and 15% to 5% on Fish Hydrolysate

Reducing BCD on frozen fish paste and hydrolysate supports the fishing industry and makes these products more affordable in the international market.

20. BCD Reduced from 30% to 5% on Frozen Fish Paste and 15% to 5% on Fish Hydrolysate

A repeated entry emphasizing support for the fishing industry through reduced customs duties on these products to make them more competitive globally.

21. Centre of Excellence in Artificial Intelligence for Education, with a Total Outlay of ₹500 Crore

A Centre of Excellence in AI will focus on advancing education through technology, with an allocation of ₹500 crore to integrate artificial intelligence into learning platforms.

22. Delay in TCS Payment Decriminalised

The budget decriminalizes delays in Assess Collection at Source (TCS) installments, making compliance less demanding and diminishing the burden on citizens.

23. FDI Limit Enhanced for Insurance from 74% to 100%

The increase in the FDI constraint for the protection segment from 74% to 100% will attract more outside speculation, cultivating development and competition in the industry.

24. Gig Workers to Get Identity Cards, Registration on E-Shram Portal & Healthcare Under PM Jan Arogya Yojana

This initiative aims to formalize gig workers, providing them with healthcare benefits, identity cards, and registration on the E-Shram portal for better social security.

25. Gyan Bharatam Mission for Survey and Conservation of Manuscripts to Cover More Than One Crore Manuscripts

The Gyan Bharatam mission focuses on preserving and digitizing over one crore valuable manuscripts, promoting cultural heritage and knowledge conservation.

26. Jan Vishwas Bill 2.0 to Be Introduced for Decriminalising More Than 100 Provisions in Various Laws

This bill seeks to relieve the burden of criminal charges by decriminalizing over 100 provisions across multiple laws, streamlining regulatory processes, and fostering ease of doing business.

27. Modified UDAN Scheme to Enhance Regional Connectivity to 120 New Destinations

The updated UDAN (Ude Desh ka Aam Naagrik) scheme aims to increase regional air connectivity, making air travel more accessible to smaller towns and cities.

28. Nuclear Energy Mission for R&D of Small Modular Reactors with an Outlay of ₹20,000 Crore

A dedicated mission for nuclear energy research and developing small standard reactors (SMRs) will enhance India’s energy security and reduce dependence on fossil fuels.

29. PM SVANIDHI with Enhanced Loans from Banks and UPI Linked Credit Cards with ₹30,000 Limit

The PM SVANIDHI conspire gives upgraded advances and UPI-linked credit cards to road merchants, enabling them to access superior money-related administrations and advance their careers.

30. TDS on Rent Increased from ₹2.4 Lakh to ₹6 Lakh

The edge for Tax Deducted at Source (TDS) on lease has been expanded to ₹6 lakh, allowing more adaptability and decreasing property owners’ assessment compliance burdens.

Also Read, 10 Hidden Tax Deductions: Can Save You Big!

31. To Boost Battery Production, Additional Capital Goods for EV and Mobile Battery Manufacturing Exempted

Exemptions on additional capital goods used for electric vehicle (EV) and mobile battery manufacturing aim to boost production and support India’s green energy transition.

32. Updated Income Tax Returns Time Limit Increased from Two to Four Years

The government has increased the time limitation for tax filing updated compensation charge returns from two to four a long time, giving citizens more adaptability in altering or redesigning their returns.

Conclusion

The Indian Budget 2025 brings comprehensive policies supporting growth across agriculture, manufacturing, healthcare, education, and technology. It focuses on strengthening the economy by encouraging innovation, self-reliance, and inclusivity, setting the stage for a sustainable future.

Author Biography

NSC vs FD – Guaranteed Returns Showdown: Which One Wins for You?

Posted on February 14, 2025 by Sudip

NSC vs FD: Regarding safe investments, National Savings Certificates (NSC) and Fixed Deposits (FD) are two of India’s most popular guaranteed return schemes. But if you’re wondering which scheme offers the highest maturity value for your investment, especially over a 5-year term, you’re not alone.

This blog, “NSC vs FD,” will compare the two, exploring their key differences, maturity calculations, and expected returns for different investment amounts. Let’s see which one stands out when it comes to returns!

1. What is NSC, and How Does It Work?

The National Investment Funds Certificate (NSC) is a government-backed venture plot advertising settled returns over a specified term. NSC has a residency of 5 or 10 years, and interest is compounded yearly but paid at development. It is a fabulous alternative for risk-averse financial specialists looking for assured returns.

Key Features of NSC:

Tenure: 5 and 10 years
Interest: 7.0% p.a. (current rates as of 2025)
Tax benefits: Under Section 80C of the Income Tax Act Learn more about tax savings here
Interest is taxable. See tax rules here

Learn more about NSC’s benefits here.

2. What is FD, and How Does It Work?

Fixed Deposits (FDs) are another popular, low-risk investment scheme offered by banks and financial institutions. With FDs, you invest a lump sum at an agreed-upon interest rate for a fixed period and receive returns at regular intervals or maturity. FDs are widely accessible and come with a flexible range of tenures.

Key Features of FDs:

Tenure: 7 days to 10 years
Interest: 6.5% – 7.5% p.a. (depending on bank and term)
Taxation: Interest is taxable, but you can avail of tax-saving FDs with a 5-year lock-in. Learn more about FD tax benefits
Risk: Very low; DICGC are insured. Learn more about DICGC.

Read more on how FDs work here

3. Comparison of Maturity Returns: NSC vs FD (Rs 3L, Rs 5L, Rs 7L, Rs 10L)

Let’s break down the returns for Rs 3,00,000 to Rs 10,00,000 investments in NSC and FD over 5 years.

1. NSC Returns on Rs 3,00,000 to Rs 10,00,000:

Investment Amount Interest Rate 5-Year Maturity (Approx.)

Principal Amount	@ of Interest	Matured Amount (Approx)
3,00,000	7.7%	4,34,710
5,00,000	7.7%	7,24,517
7,00,000	7.7%	10,14,324
10,00,000	7.7%	14,49,034

To calculate your NSC maturity accurately, you can use an online NSC calculator here

2. FD Returns on Rs 3,00,000 to Rs 10,00,000:

Investment Amount Interest Rate 5-Year Maturity (Approx.)

Principal Amount	@ of Interest	Matured Amount (Approx)
3,00,000	7.0%	4,24,433
5,00,000	7.0%	7,07,389
7,00,000	7.0%	9,90,345
10,00,000	7.0%	14,14,778

To calculate your FD maturity accurately, you can use an online FD calculator here

4. Tax Considerations: How NSC vs FD Differ

Both NSC and FD offer tax benefits under certain conditions, but they also have tax liabilities that must considered when calculating overall returns.

NSC Taxation:

NSC interest is taxable under the Income Tax Act.
A National Saving Certificate (NSC) qualifies for tax deduction under Section 80C, up to Rs 1.5 lakh. here.
Interest is reinvested and taxed annually as per your income tax slab.

FD Taxation:

FD interest is also taxable, but TDS (Tax Deducted at Source) applies if the interest earned exceeds Rs 40,000 (Rs 50,000 for senior citizens).
You can claim a tax deduction under Section 80C for tax-saving FDs with a 5-year lock-in period. More about TDS here.

For a deeper dive into how FD interest is taxed, visit this guide

Also Read – 10 Hidden Tax Deductions: Can Save You Big!

5. Which is Better for You: NSC vs FD?

The choice between NSC and FD depends on a few variables, such as your venture objectives, charge arranging, and the time outline for your speculations. NSC may be superior if you center on tax-saving benefits and ensured returns. On the other hand, if you’re looking for adaptability with higher intrigue rates, an FD might suit you better.

Read more on choosing the right investment here

FAQs on NSC vs FD:

Q1. What is the maturity amount for Rs 5,00,000 in NSC?

A1. At an interest rate of 7% p.a., Rs 5,00,000 will grow to approximately Rs 7,00,000 after 5 years in NSC.

Q2. Is NSC a better option than FD?

A2. NSC offers higher returns (7% p.a.) than FDs, which offer 6.5%- 7% p.a., but it has tax liabilities on the interest.

Q3. Can I withdraw before maturity in NSC?

A3. No, NSC has a lock-in period of 5 years. Early withdrawal is not allowed, except in extreme cases like death. NSC withdrawal rules.

Conclusion: NSC vs FD – Which Scheme Should You Choose?

NSC vs FD: Eventually, choosing NSC or FD depends on your financial capabilities. NSC might be the proper choice for tax benefits and assure determined development. In any case, FD might be the superior choice if you need adaptability and intriguing payouts.

Before deciding, consider the maturity amounts, tax liabilities, and investment horizon. The best way forward is to assess your financial needs and consult a financial advisor.

Income Tax Slabs for FY 2025-26: Rates & Ultimate Breakdowns

Posted on February 12, 2025 by Sudip

Introduction

The Income Tax Department experiences everyday modifications, and the Income Tax Slabs for FY 2025-26 (Evaluation Year 2026-27) are no exemption. Whether you are a salaried person, a self-employed proficient, or a trade proprietor, understanding the most recent charge rates is pivotal to compelling assessing, arranging, and maximizing investment funds.

This guide will break down the Income Tax Slabs, exemptions, deductions, and key changes to help you stay ahead of the curve.

Link to Official Government Tax Websites

Income Tax Department: This is a link to India’s official Income Tax Department for information on tax filing and tax slabs.
Income Tax Return Portal: Link to the official e-Filing Portal for online filing and related services.

What Are Income Tax Slabs?

Income tax slabs are the categories that determine how much tax a taxpayer needs to pay based on their income. In India, income is taxed at different rates depending on its slab. The slab rates for FY 2025-26 include both the old and new tax regimes.

Also Read, 10 Hidden Tax Deductions: Can Save You Big!

Table: Income Tax Slabs – FY 2025-26

Income Range (INR)Tax Rate (Old Regime)Tax Rate (New Regime)

Income Tax Slabs	New Tax Regime (Tax Rate)	Income Tax Slabs	Old Tax Regime (Tax Rate)
Upto Rs. 4,00,000	NIL	Up to 2.5 Lakh	NIL
Rs. 4,00,001 – Rs. 8,00,000	5%	2.5 Lakh to 5 Lakh	5%
Rs. 8,00,001 – Rs. 12,00,000	10%	5 Lakh to 10 Lakh	20%
Rs. 12,00,001 – Rs. 16,00,000	15%	Above 10 Lakh	30%
Rs. 16,00,001 – Rs. 20,00,000	20%
Rs. 20,00,001 – Rs. 24,00,000	25%
Above Rs. 24,00,000	30%

The old regime provides exemptions and deductions, while the new regime simplifies the tax structure but eliminates many of these exemptions.

Key Changes in Income Tax Slabs for FY 2025-26

The Income Tax Slabs for FY 2025-26 include several updates, especially for those opting for the new tax regime. Key changes include:

Higher tax-free threshold: No tax for incomes up to INR 2.5 lakh.
Simplified rates under the new tax regime.
The old regime continues to offer deductions like 80C and 80D, while the new regime does not.
With the new tax structure, people who gain up to Rs. 12,00,000 will have no tax liability due to the expanded discount of Rs. 60,000. For salaried people, the tax liabilities will be zero for livelihoods up to Rs. 12,75,000 due to the Rs. 75,000 standard conclusion.

These changes significantly impact tax liability for individuals at various income levels. Here is a breakdown of what you can expect.

Link to Tax News and Updates Sites

Tax India Online: Link to Tax India Online for the latest updates on tax policies and slabs.
ET Tax (Economic Times): Link to ET Tax for expert analysis on tax changes and strategies.

The New Tax Regime Explained

Introduced in 2020, the new tax regime aims to simplify tax filing by offering lower tax rates in exchange for eliminating most exemptions and deductions. The tax rates in the new regime are the same as in the old regime but without the complexity of claiming deductions.

For example, a salaried individual earning INR 7 lakh may benefit from a lower tax rate under the new regime than the old one, where they would have to claim various exemptions to reduce their taxable income.

Tax Exemptions and Deductions for FY 2025-26

In the old tax regime, there are various exemptions and deductions available:

Section 80C Investments in PPF, EPF, life insurance premiums, etc.
Section 80D: Deductions for health insurance premiums.
House Rent Allowance (HRA): Deduction for rent paid.

Read For Tax Exemptions: NSC vs FD – Guaranteed Returns Showdown: Which One Wins for You?

These deductions can significantly reduce taxable income but do not apply under the new tax regime.

Link to Articles on Tax Deductions (80C, 80D, etc.)

Section 80C Tax Deductions: Link to an article explaining Section 80C deductions for better understanding.
Health Insurance Deductions 80D: Add a link to this guide on 80D deductions for taxpayers seeking advice on health insurance savings.

Understanding the Impact of the New Tax Regime on Different Income Groups

Different income groups will experience varying impacts from the new tax regime. For example:

Low-income earners (below INR 5 lakh) benefit from rebates under the new regime.
Middle-income earners (INR 5-10 lakh) might face minimal differences between the regimes, but they could save on tax filing complexity with the new system.
High-income earners (above INR 10 lakh) might benefit more from the old regime’s exemptions.

It is essential to calculate whether claiming exemptions under the old regime results in a lower tax liability than opting for the new, simplified structure.

Link to Tax Rebate Information

Section 87A Tax Rebate: Link to the section on Section 87A Tax Rebate for taxpayers earning less than 5 lakh.

FAQ Section (Based on “People Also Ask” Data)

What is the income tax rate for FY 2025-26 in India?

The rates depend on the income range and whether you choose the old or new tax regime. For example, income above INR 10 lakh is taxed at 30% under both regimes.

2. How do I choose between the new and old tax regime?

The old regime might be better if you have significant deductions like 80C or HRA. Otherwise, the new regime offers simplified tax filing with lower rates.

3. Can I claim exemptions under the new tax regime?

No, exemptions are only available under the old tax regime.

4. What are the new tax slabs for salaried individuals in FY 2025-26?

The tax slabs for salaried individuals are the same as for general taxpayers, with rates starting at 5% for income above INR 2.5 lakh.

5. Is a tax rebate below 5 lakh in FY 2025-26?

Yes, there is a tax rebate under Section 87A for incomes up to INR 5 lakh, reducing the tax liability to zero.

Section 87A Tax Rebate: Link to the section on Section 87A Tax Rebate for taxpayers earning less than 5 lakh.

6. How does the new tax regime impact my tax liability for 2025-26?

It simplifies tax filing but may result in higher taxes if you claim significant deductions.

7. What exemptions can I claim under the old tax regime for FY 2025-26?

You can claim exemptions like HRA, deductions under 80C, 80D, and other allowances.

8. How will the AY 2026-27 income tax slabs affect my savings?

The updated slabs can lower your tax liability, depending on whether you opt for the new or old regime.

9. What deductions can be availed under the old tax regime in FY 2025-26?

Deductions include investments under Section 80C, health insurance under 80D, and home loan interest.

Conclusion with Actionable Takeaways

In conclusion, understanding the most recent FY 2025-26 tax block is essential for making educated budgetary choices. Whether you pick the unused assessment administration or proceed with the ancient one, persistently evaluate your pay, conclusions, and exceptions sometime recently, making a last choice. Here is a fast recap:

If you have significant exemptions, the old tax regime may be better.
If you prefer simplicity, the new tax regime could save you time and hassle.
Plan your tax deductions wisely to minimize your tax liability and maximize savings.

Always stay updated with the latest changes and consider consulting a tax professional for tailored advice.

Author Biography

10 Hidden Tax deductions: Can Save You Big!

Posted on February 12, 2025 by Sudip

Hidden Tax Deductions: As tax season approaches, most Indian citizens scramble to optimize their assessed investment funds. Whereas findings like Segment 80C are broadly known, there are a few covered-up diamonds that numerous citizens neglect.

These lesser-known findings may assist you in sparing noteworthy sums on your charge, making a genuine distinction in your accounts.

This article will investigate 10 tax-saving openings you might not have known and nearby viable cases to direct your claims. Let’s plunge into these often-overlooked derivations and see how they can advantage you.

1. Tax Deductions on Donations to Charitable Institutions

Did you know that gifts to particular charitable organizations qualify for assessment conclusions beneath Segment 80G? This finding is more fulfilling since your sum can diminish your assessable salary, depending on the institution and the gift sort. Contributions to recognized bodies like the Prime Minister’s National Relief Fund can provide 100% deductions, while others may provide 50% deductions.

Learn more about Section 80G on Income Tax India.
Consider donating to GiveIndia for tax-saving purposes

Example: You donate ₹10,000 to a registered NGO eligible for a 50% deduction. You can claim ₹5,000 as a tax-saving deduction!

2. Interest on Home Loans for Renovation (Section 80E)

Most are familiar with the home loan principal deduction under Section 80C, but did you know you can also claim tax benefits on the interest paid for home renovations? This deduction is under Section 80E, applicable on loans taken for renovation or improvement of the property.

Explore home loan tax benefits with HDFC.
Check out tax-related insights on home loans from TaxGuru.

Example: If you take a loan of ₹2,00,000 for house repairs, the interest paid on the loan is eligible for tax deduction. It can help reduce your taxable income, especially if you’ve made significant home improvements.

3. Tax Deductions for Education Loans (Section 80E)

Education loans help you invest in your future and offer you tax relief. The interest paid on loans for higher education Under Section 80E is fully deductible. It applies to loans for you or your family members, including children and spouses.

For education loan options, visit SBI Education Loan.
Find more about tax deductions for educational expenses on Policybazaar.

Real-Life Scenario: You’ve borrowed ₹5,00,000 for your child’s medical studies abroad. If the interest on this loan is ₹50,000, you can deduct the entire amount of Rs. ₹50,000 from your taxable income, year after year, for up to 8 years!

4. Deduction for Electric Vehicles (Section 80EEB)

To reduce pollution and promote sustainable transport, the Indian government now provides deductions for interest paid on loans taken to purchase electric vehicles (EVs). Under the 80EEB Section, you can claim a deduction for interest paid up to ₹1,50,000 annually.

Learn about electric vehicle loans with Tata Capital.
Check out more on India’s green transport policies at the Ministry of Heavy Industries.

Example: You take a loan of ₹10,00,000 to buy an electric car. If your annual interest payment is ₹60,000, you can claim the entire ₹60,000 as a deduction under Section 80EEB.

5. Tax Deductions for Rent Paid (Section 80GG)

If you don’t receive a House Rent Allowance (HRA) but still pay rent, you can claim a deduction under Section 80GG. This deduction is up to ₹5,000 per month or 25% of your total rent income, whichever is lower.

Explore rent-related tax-saving strategies on LegalRaasta.
Find housing options and tax tips on MagicBricks.

Example: If you earn ₹50,000 per month and pay ₹15,000 in rent, you can claim a deduction of ₹5,000 per month under Section 80GG, saving ₹60,000 annually!

6. Medical Insurance Premiums (Section 80D)

While numerous citizens know about the benefits of therapeutic protection, a few still underestimate how much they can save. 80D Section allows you to claim deductions on premiums for health insurance policies for yourself, your spouse, children, and even your parents.

Check out insurance options from ICICI Prudential Health Insurance.
Learn more about health tax savings on Mediclaim.

Example: If you pay ₹20,000 annually for your health insurance and another ₹25,000 for your parent’s policy, you could save up to ₹45,000 in tax deductions under Section 80D!

7. Tax Deductions for Income from Rural Agricultural Property (Section 10(1))

If you earn income from agricultural activities on land situated in rural areas, this income is exempt from taxation under Section 10(1). It can significantly relieve taxpayers involved in farming or agricultural ventures.

Find more information on agricultural tax exemptions at NABARD.
Learn more about agricultural policies on ICAR.

Example: If you earn ₹2,00,000 from selling crops grown on your rural farmland, you are not required to pay tax on this income.

8. Tax Benefit for Disabled Dependents (Section 80DD & 80DDB)

If you have a debilitated family part, arrangements beneath Segment 80DD and Segment 80DDB permit you to claim derivations for their restorative treatment, preparation, or restoration costs. The deductions can be substantial depending on the severity of the disability.

Explore tax-saving opportunities for disabilities at Enable India.
Learn more about medical expenses related to disabilities on Policybazaar

Example: For a dependent with severe disability, you can claim a maximum deduction of ₹1,25,000 under Section 80DD. Additionally, medical expenses up to ₹1,00,000 are deductible under Section 80DDB for specific illnesses.

9. Tax DeductionS for Contribution to National Pension Scheme (NPS) (Section 80CCD)

The NPS is a government-backed annuity plot that offers charge benefits underneath Section 80CCD. Commitments made to NPS qualify for an additional ₹50,000 determination over the ₹1,50,000 imperative of Zone 80C, giving impressive save stores.

Learn more about NPS at NSDL.
Get insights on retirement planning and NPS tax savings from ET Money..

10. Tax Deductions for Startups and Small Businesses

If you run a startup or a small business, you can claim various deductions for expenses incurred in your business operations. These include machinery, raw materials, employee salaries, and other costs. The Indian government also offers startup tax rebates under sections 80-IAC and 80-IA.

For startup tax-saving tips, visit Startup India.
Explore business deductions with resources from the Indian Angel Network.

FAQ on Hidden Tax Hacks

1. Can I claim deductions for home renovation loans?

Yes, interest paid on home renovation loans is eligible for deductions in Section 80E of the Income Tax Act.

2. What is the maximum deduction for donations under Section 80G?

The deduction amount depends on the type of institution, ranging from 50% to 100% of the donation amount.

3. How can I claim EV (Electric Vehicle) loan tax benefits?

You can claim a tax rebate for the complication on EV (Electric Vehicle) up to ₹1,50,000 annually Under Section 80EEB

Conclusion: Key Takeaways

Taxpayers have various opinions that can diminish their charge risk altogether. From giving to charity and claiming intrigued on domestic redesigns to sparing through electric vehicle credits and NPS commitments, citizens can make savvy choices to spare. Understanding and applying these lesser-known derivations to maximize your investment funds for the monetary year.

Actionable Tip: If you qualify for any of the above conclusions, don’t miss the chance to lower your assessment burden this year. Counsel an assessment master to guarantee you make the most of your qualified findings.

Sudip Sengupta

Author

I am Sudip Sengupta, the founder of Tax Orbit, a finance and consulting firm dedicated to simplifying complex tax and financial concepts for individuals and businesses. With over 21 years of experience, I have witnessed how challenging financial decisions can be, which inspired me to create Tax Orbit. My mission is to empower clients with the knowledge they need to make informed choices. Additionally, I run Tfin Career, a USA-based blog offering finance and taxation career guidance, and I’m launching a training module to help aspiring professionals thrive in the field.