From Tax Relief to Price Hikes: 6 Big Changes Impacting Your Wallet from April 1
New tax slabs, TDS limits, and import duty revisions to shape India's financial landscape
BNH NETWORK
April 2025: Major Economic and Financial Changes Take Effect
New Delhi - A fresh financial year has begun, bringing with it key economic changes that will directly impact taxpayers, investors, and consumers. From revised tax slabs to alterations in import duties and changes in UPI transactions, here’s a breakdown of the six most crucial policy shifts taking effect today.
FACT FILE:
| Change | Details |
|---|---|
| Tax-Free Income Limit | Raised to ₹12.75 lakh (with standard deduction) |
| New Tax Slab | 25% tax for incomes between ₹20-24 lakh |
| TDS on Rent | Limit increased from ₹2.4 lakh to ₹6 lakh |
| Senior Citizen FD TDS Exemption | Raised to ₹1 lakh |
| TCS Exemption for Foreign Transfers | Increased from ₹7 lakh to ₹10 lakh |
| Updated Tax Return Filing Window | Extended to 48 months (with penalties) |
| ULIP Capital Gains Tax | 12.5% LTCG and 20% STCG introduced |
| Customs Duty Changes | Prices of some goods to increase, others to decrease |
1. Revised Tax Slabs: Bigger Relief for Middle-Class Earners
The new tax regime has been tweaked to provide substantial relief to middle-income earners. Individuals earning up to ₹12 lakh annually will now be exempt from tax, while the standard deduction of ₹75,000 further pushes the tax-free limit to ₹12.75 lakh. Additionally, a new 25% tax slab has been introduced for incomes ranging from ₹20-24 lakh, replacing the earlier 30% rate that applied to earnings above ₹15 lakh.
2. TDS Limits Increased for Rent and Savings
The government has revised Tax Deduction at Source (TDS) limits across multiple categories:
- Rental income TDS threshold has been raised from ₹2.4 lakh to ₹6 lakh.
- Senior citizens can now earn up to ₹1 lakh in Fixed Deposit interest without TDS deductions.
- TDS on professional services now applies only above ₹50,000, up from ₹30,000 earlier.
3. Higher TCS Exemption for Foreign Transactions
For parents sending money abroad for their children's education, the Tax Collected at Source (TCS) exemption limit has been raised from ₹7 lakh to ₹10 lakh. Any remittance exceeding this limit will still attract TCS unless it is through an educational loan, in which case exemptions remain intact.
4. Extended Window for Filing Updated Tax Returns
Taxpayers now have a longer window—up to 48 months—to file updated returns for any miscalculations in previous filings. However, penalties apply:
- Returns filed after 24 months will attract an additional 60% tax.
- Returns between 36-48 months will carry a 70% tax surcharge.
5. Capital Gains Tax on ULIPs Introduced
Unit Linked Insurance Plans (ULIPs) with an annual premium exceeding ₹2.5 lakh will now be treated as capital assets. Gains from such policies will attract either:
- 12.5% Long-Term Capital Gains (LTCG) tax if held for over a year.
- 20% Short-Term Capital Gains (STCG) tax if liquidated within a year.
6. Changes in Import Duties Impacting Prices
The government has revised customs duties on 150-200 products, leading to price fluctuations:
- Cheaper: Luxury cars, life-saving drugs, and EV battery components.
- Costlier: Smart meters, imported footwear, and high-end LED TVs.
While some of these changes take effect immediately, others depend on notifications from the Central Board of Indirect Taxes & Customs (CBIC). Consumers and investors are advised to review these updates before making financial decisions.
