New Tax Regime 2025-26
Key Updates for Taxpayers
The Union Budget 2025-26, announced on February 1, 2025, brought significant changes to the income tax system, offering relief to individuals and businesses. Here's a quick overview of the key updates:
Key Highlights:
1. Updated Tax Slabs for FY 2025-26
- ₹0 – ₹4 Lakhs: NIL
- ₹4 Lakhs – ₹8 Lakhs: 5% Tax
- ₹8 Lakhs – ₹12 Lakhs: 5% Tax
- ₹12 Lakhs – ₹16 Lakhs: 15% Tax
- ₹16 Lakhs – ₹20 Lakhs: 20% Tax
- ₹20 Lakhs – ₹24 Lakhs: 25% Tax
- Above ₹24 Lakhs: 30% Tax
2. Standard Deduction
Increased to ₹75,000 for salaried individuals and pensioners.
TDS & TCS Changes:
1. TDS on FD Interest:
Exemption limit doubled from ₹50,000 to ₹1,00,000.
2. TCS on Rent:
Limit increased from ₹2,40,000 to ₹6,00,000.
What Does This Mean for You?
- More Savings: Lower taxes and higher exemptions lead to more money in your pocket.
- Simplified Tax Compliance: Easier TDS/TCS deductions and an increased standard deduction.
- Better Financial Flexibility: Increased disposable income to boost spending and investments.
Did You Know? Interest Income Qualifies for 10AA Deductions!
Boosting SEZ Business Profits with Section 10AA Tax Deductions
Section 10AA of the Income Tax Act offers significant tax incentives for businesses operating in Special Economic Zones (SEZs). This section allows qualified SEZ units to claim deductions on profits derived from export activities, encouraging growth in export-oriented sectors.
How it Works:
1. Eligibility: Businesses involved in export activities within SEZs qualify.
2. Deduction Scale:
- First 5 Years: 100% deduction on export profits.
- Next 5 Years: 50% deduction.
- Last 5 Years: 50% of profits if reinvested in the business.
Key Takeaway:
Recent rulings confirm that even interest earned on bank deposits related to SEZ businesses can be counted as part of business profits for deductions. This opens more avenues for businesses to maximize their benefits under Section 10AA and fuel further growth.