Key Tax and GST Changes Effective April 2025
As we step into the new fiscal year, several significant changes in Income Tax and Goods and Services Tax (GST) have come into effect in India. Staying informed about these updates is crucial for both individuals and businesses to ensure compliance and optimize financial planning.
🔍 Quick Highlights:
- Income up to ₹12,00,000 now tax-free under new tax regime
- Standard Deduction raised to ₹75,000
- Updated Income Tax Slabs for FY 2025-26
- Higher TDS thresholds for rent and interest income
- GST login now requires Multi-Factor Authentication (MFA)
- PAN-Aadhaar linking deadline ended on March 31, 2025
Revised Income Tax Slabs and Increased Exemptions
- Zero Tax on Income up to ₹12,00,000: Under the new tax regime, individuals with an annual income up to ₹12,00,000 are exempt from paying income tax.
- Standard Deduction Increased: The Standard Deduction for salaried individuals has been raised to ₹75,000, effectively making income up to ₹12,75,000 tax-free.
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Revised Income Tax Slabs (FY 2025-26):
- ₹0 – ₹4,00,000: Nil
- ₹4,00,001 – ₹8,00,000: 5%
- ₹8,00,001 – ₹12,00,000: 10%
- ₹12,00,001 – ₹16,00,000: 15%
- ₹16,00,001 – ₹20,00,000: 20%
- ₹20,00,001 – ₹24,00,000: 25%
- Above ₹24,00,000: 30%
These adjustments aim to boost disposable income and economic activity.
Changes in TDS and TCS
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Enhanced TDS Thresholds:
- TDS on interest income for senior citizens increased to ₹1,00,000
- TDS on rent threshold raised from ₹2,40,000 to ₹6,00,000
- Revised TCS Rules: TCS on foreign remittances under the LRS will now apply only beyond ₹10,00,000 instead of the earlier ₹7,00,000 threshold.
These revisions help reduce the tax deducted at source, benefitting a wider base of taxpayers.
GST Compliance and Procedural Updates
- Mandatory Multi-Factor Authentication (MFA): MFA is now required to log in to the GST portal for better security.
- E-Way Bill Validity: Can now be generated only for documents not older than 180 days.
- Input Tax Credit (ITC) Update: ITC must now be claimed through the Input Service Distributor (ISD) mechanism.
These measures are aimed at curbing misuse and enhancing procedural transparency.
Unified Pension Scheme (UPS)
From April 1, 2025, the Unified Pension Scheme is applicable to central government employees. Those with 25+ years of service are eligible for a pension equating to 50% of the average basic salary of the last 12 months.
PAN-Aadhaar Linking: Deadline Passed
March 31, 2025, was the final deadline for PAN-Aadhaar linking. PANs not linked are now inoperative, resulting in:
- Disqualification from receiving dividend or interest income
- Higher TDS deduction on all applicable transactions
- Inability to access Form 26AS or claim tax credits
Taxpayers are urged to check their PAN-Aadhaar status to avoid compliance hurdles.
Conclusion
The fiscal year 2025-26 introduces major updates to India’s tax and GST framework. It's advisable for individuals and businesses to stay updated and seek professional assistance when needed.
Stay tuned to TaxGV.com for timely updates, tax-saving strategies, and expert analysis.
