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The new budget will come into effect from 1 April 2025 tomorrow. That is, work will start on the announcements made by the government on 1 February while presenting the budget. However, when the schemes will benefit, it will depend on the type of scheme and the process of implementing.
Benefits such as income tax exemption or subsidy are implemented from 1 April 2025, as they are associated with the financial year. At the same time, it takes time to get the benefit of infrastructure and development projects, social welfare schemes, because there is a long process to work on them.
6 changes that will be applicable from tomorrow …
1. Change in Tax Slab: New Slab for income of 20 to 24 lakhs
What has changed: Under the New Tax Period, no tax will have to be paid on earnings up to Rs 12 lakh. This discount will be Rs 12.75 lakhs with standard deductions of 75 thousand for employed people. A new slab of 25% tax has also been included in the New Tax Resetam for income of 20 to 24 lakhs.
What will be the effect: Earlier, the maximum rate of 30% used to apply to income above Rs 15 lakh, but now this limit has been increased to Rs 24 lakh. This will save medium and high-middle income groups in tax.
2. TDS limit limit increased: No tax on rental income up to ₹ 6 lakh
What has changed: The range of TDS (Tax deduction at source) has been increased on some payments …
- TDS exemption doubles on income from rent: The limit of TDS has increased from ₹ 2.4 lakh to ₹ 6 lakh on the income from rent.
- Discounts on interest income for senior citizens double: The TDS limit has increased from ₹ 50 thousand to ₹ 1 lakh for senior citizens earning interest income from bank FD.
- TDS limit on professional service: The limit of TDS on professional service has now increased from 30 thousand to 50 thousand.
What will be the effect: This will reduce the burden of TDS on low -income persons and improve cash flow.
3. TCS limit limit increased: No tax on sending ₹ 10 lakh for studies abroad
What has changed: The tax collected at source (TCS) limit has now increased from Rs 7 lakh to Rs 10 lakh on sending money for studies abroad. On the other hand, if the money has been taken from any financial organization like bank etc., TCS will not be attached.
What will be the effect: The removal of TCS will benefit both students and their families. Earlier, 0.5% -5% TCS was deducted on the amount of more than 7 lakhs. This made the transfer process a bit hectic. At the same time, the entire amount of up to 10 lakh rupees will be reached at the other end.
4. More time to fill updated returns: you will be able to file for 48 months
What has changed: Now taxpayers will be able to file updated returns for 48 months instead of 24 months from the end of the assessment year. There are some conditions of this …
- 60% additional tax on returns filed between 24 and 36 months.
- 70% additional tax on returns filed between 36 and 48 months.
What will be the effect: This will give taxpayers more time to rectify their mistakes. Voluntary compliance will also increase. That is, to follow the rules, laws of a person or organization.
5. Capital Gain Tax on ULIP: More than ₹ 2.5 lakh premium will be considered a capital asset
What has changed: If the premium of Unit Linked Insurance Plan is more than Rs 2.5 lakh per year, it will be considered a capital asset. Capital gains tax will be levied at any benefit caused by capitalizing such ULIPs. ULIP is a product in which a part of the premium is invested in the stock market.
- If it is kept for more than 12 months, it will be taxed as 12.5% in the form of Long Term Capital Gain (LTCG).
- If it is kept for less than 12 months, it will be taxed as 20% as short term capital gains (STCG).
What will be the effect: Those investing in high premium ULIP will now have to pay tax. The government has made these changes to prevent high-income tax payers from using ULIPs as tax-free investment instruments. A large part of the ULIP premium is invested in the stock market, so the government argued that it should not get tax exemption like traditional insurance.
6. Cheap-cheaper: 150-200 products to change custom duty
What has changed: In the budget presented in February, the government had reduced custom duty on some products and increased on some. This will affect around 150-200 products. Generally, changes in custom duty are applied from 1 April 2025, the beginning of the financial year.
However, the dates for the implementation of some changes depend on the notifications of the Central Indirect Taxes and Customs Board (CBIC). For example, in the previous budget, some custom duty changes (such as mobile phones and precious metals) came into force from 24 July 2024.
What will be the effect: Some things can be inexpensive and some expensive. The depreciation of custom duty affects the prices of things.
Items that can be cheap:
- Imported cars with an engine capacity of more than 40 thousand dollars or engine capacity of more than 3 thousand cc.
- Imported motorcycles in the form of CBU unit whose engine capacity does not exceed 1600 cc.
- Removing custom duty from 36 life saving drugs will reduce the cost of critical treatment.
- EVs can be cheap. Sakar has removed the duty of 35 capital goods for battery manufacturing.
- 28 capital goods were exempted from custom duty for mobile phone battery production.
Items that can be expensive:
- Smart meter solar cells, imported shoes, imported candles, imported boats and other ships, PVC Flex Films, PVC Flex Sheets, PVC Flex Banner, Cloth made of Neeting Process, LCD/LED TV
How long will the schemes announced in the budget be benefited?
- Social welfare schemes such as cash assistance for farmers, schemes for women, or employment schemes can start getting benefit from June-July.
- It takes time to benefit projects like road, rail, or school-hospital, because they are processed by planning, tender and construction.
Learn the entire process of budget in 7 points …
- Budget preparation: Budget is prepared by the Finance Ministry. Various ministries, departments and experts are consulted under the leadership of the Finance Minister.
- Budget presentation: Every year on 1 February, the Finance Minister presents the annual budget in the Lok Sabha. The budget speech contains the details of the government’s income and expenditure.
- Discussion in Parliament: After the budget is presented, it is discussed in a detailed discussion in the Lok Sabha and Rajya Sabha. MPs express their views on various aspects.
- Appropriation Bill: After discussion, it is introduced in both houses, which allows the government to withdraw funds from the integrated fund.
- Finance Bill: The Finance Bill is introduced in both Lok Sabha and Rajya Sabha to implement the tax changes proposed in the budget.
- President’s approval: After both bills (appropriation and finance) are passed by Parliament, they are sent to the President for approval.
- implement: After the President’s consent, they become laws and the budget comes into force. The budget applies for the financial year starting from 1 April.
