Roadmap for economic growth…

• Zero-poverty
• Hundred per cent good quality school education
• Access to high-quality, affordable, and comprehensive healthcare
• Hundred per cent skilled labour with meaningful employment
• Seventy per cent women in economic activities
• Seventy per cent women in economic activities

 

The Union Budget 2025-2026 promises to continue Government’s efforts to accelerate growth, secure inclusive development, invigorate private sector investments, uplift household sentiments, and enhance spending power of India’s rising middle class. The Budget proposes development measures focusing on poor (Garib), Youth, farmer (Annadata) and women (Nari).

 

Simplified and concise tax laws

 

The proposed Income Tax Bill 2025 aims to reduce the complexity of India’s current tax framework. This includes simplifying the language of the direct tax laws, deleting obsolete and redundant provisions, and reducing litigation.

 

Based on the finance minister's statement, salary income up to Rs 12.75 lakh will be tax-free under the revised rebate and slabs in the new regime. In addition, salaried employees will be eligible for a standard deduction of Rs 75,000. Therefore, the new rebate and standard deduction introduced by the finance minister ensure that salary income up to Rs 12.75 lakh remains tax-free.

 

Encouraging voluntary compliance, Budget extends time-limit to file updated returns for any assessment year, from the current limit of two years, to four years. Over 90 Lakh taxpayers paid additional tax to update their income. Small charitable trusts/institutions have been given the benefit by increasing their period of registration from 5 to 10 years, reducing compliance burden. Further, tax payers can now claim annual value of two self-occupied properties as NIL, without any condition. Last budget’s Vivad Se Vishwas Scheme has received a great response, with nearly 33,000 tax payers having availed the scheme to settle their disputes. Giving benefits to senior and very senior citizens, withdrawals made from National Savings Scheme Accounts on or after 29th of August, 2024 have been exempted. NPS Vatsalya accounts also to get similar benefits.

 

Introduction of a unified ‘tax year’

 

A major structural change in the Income Tax Bill 2025 is the introduction of a standardized ‘Tax Year,’ indicating a 12-month period, which will replace the dual financial year (April to March) and assessment year system. This change is particularly beneficial for new businesses or professionals, as their tax year will commence from:

 

 

The draft version of the Income Tax Bill 2025 includes no changes to the income tax slabs and rates (under the new tax regime) from those announced in the Union Budget 2025 for the fiscal year 2025-26. This move ensures continuity for taxpayers while simplifying the legislative framework.