Budget 2025-26: More Savings, Less Tax — How It Transforms Your Wallet!


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	Blog Categories All Corporate Laws (1) Direct Tax (3) Govt. Schemes (1) Indirect Tax (4) Trademarks (2) Budget 2025-26: More Savings, Less Tax — How It Transforms Your Wallet! Category: Direct Tax, Posted on: 06/04/2025 , Posted By: CS Nikhil Israni Visitor Count:74 Budget 2025-26: More Savings, Less Tax — How It Transforms Your Wallet! The Union Budget 2025-26 has sparked widespread interest across households, businesses, and professionals alike — and for good reason. With a clear focus on good governance, voluntary compliance, and tax simplification, Finance Minister Nirmala Sitharaman has unveiled a tax-friendly budget that places the common man at its heart. As a tax practitioner, I’ve taken a deep dive into the proposals to decode what it all means for you — whether you're a salaried employee, a senior citizen, a small business owner, or an investor. 1. A Middle-Class Bonanza: Higher Income, Zero Tax The most striking announcement? An individual earning up to ₹12 lakh annually will pay zero tax under the new regime. New Tax Exemption Limit: ₹12 lakh (₹1 lakh/month average) For Salaried Individuals: Limit rises to ₹12.75 lakh with ₹75,000 standard deduction This is a massive relief for the middle class, making a significant part of the workforce virtually tax-free, thereby enhancing disposable income and encouraging spending. 2. Relief for Senior Citizens Senior citizens with interest income can now breathe easy: TDS threshold on bank/post office interest raised from ₹50,000 to ₹1,00,000 This move aims to cut down TDS hassles for elderly individuals, ensuring more liquidity in hand and reducing unnecessary compliance. 3. Renters & Landlords: Higher TDS Limit on Rent TDS on rent threshold increased from ₹2.40 lakh to ₹6 lakh per annum. This simplifies life for both landlords and tenants, especially in smaller towns and for individuals renting out modest properties. 4. Making Voluntary Compliance Easier Updated ITR time-limit extended from 2 to 4 years. This gives taxpayers more room to rectify omissions or update financial disclosures, promoting transparency without penalties. 5. Virtual Digital Assets (Crypto) Brought Into the Net Mandatory disclosure of crypto transactions in prescribed statements Definitions aligned with international norms This reinforces the government’s intention to bring digital assets into the formal economy, without stifling innovation. 6. Small Charitable Trusts: Lesser Burden, Longer Tenure Registration period extended from 5 years to 10 years This move reduces paperwork and instils long-term operational stability for genuine charitable institutions. 7. No Tax on Two Self-Occupied Properties The earlier restriction on claiming only one self-occupied property as tax-free is now gone. Homeowners can now: Claim “Nil Annual Value” for two self-occupied houses without condition. This gives relief to families owning more than one house — say, a working home in the city and ancestral property in their hometown. 8. TCS Relaxation: Smoother Foreign Remittances TCS under LRS (Liberalized Remittance Scheme) raised from ₹7 lakh to ₹10 lakh Delayed payment of TCS decriminalized (if paid by due date) This eases the process for international travel, education, or investment abroad, especially for middle-class families sending kids overseas. 9. Simplified Transfer Pricing for Businesses New block pricing regime proposed for a 3-year period, instead of annual assessment Expansion of Safe Harbour Rules This adds predictability and reduces litigation for companies involved in international transactions. 10. More Push for Start-ups, IFSC & Shipping Start-up incorporation deadline extended to April 1, 2030 Benefits to ship-leasing, insurance, and treasury units in IFSC Tonnage tax extended to inland vessels These steps aim to revive entrepreneurship, boost Make in India, and make India a global financial hub. 11. Infrastructure Gets a Capital Boost Tax exemption extension for Sovereign Wealth Funds and Pension Funds investing in Indian infrastructure until March 31, 2030 This will fuel long-term investments into roads, railways, logistics, and energy sectors, with cascading benefits for employment and GDP. 12. Capital Gains: Parity for NRIs Long-term capital gains tax parity introduced for non-resident investors This improves investor confidence and aligns with the objective of ease of doing business globally. 13. Relief for Small Businesses: No TCS on sale of specified goods worth more than ₹50 lakh A clear signal to support MSMEs and bring informal transactions into the tax net without creating new burdens. Final Thoughts The Union Budget 2025-26 doesn't try to be all things to all people — and that's precisely why it's effective. It shows a clear preference for: Tax simplification Trust-based governance Empowering the middle class Ease of doing business Encouraging voluntary compliance For the common man, this translates to less tax, less paperwork, and more peace of mind. As a tax practitioner, I view this budget as a balanced blend of relief and reform. While it may cost the exchequer nearly ₹1 lakh crore in revenue, the long-term benefits of increased compliance, transparency, and taxpayer goodwill are immeasurable. Have Questions? Feel free to reach out or drop your queries in the comments. Whether you're salaried, self-employed, or retired — let's discuss how this Budget impacts you. 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