The latest budget introduces several reforms aimed at easing compliance, encouraging voluntary tax adherence, and boosting economic growth. The focus remains on providing tax relief to individuals, enhancing business opportunities, and simplifying the regulatory landscape.
Key Tax and Compliance Reforms
🔹 Reduced Compliance for Charitable Trusts
The period of registration for small charitable trusts and institutions has been extended from 5 years to 10 years, reducing the administrative burden.
🔹 Tax Benefits for Homeowners
Taxpayers can now claim two self-occupied properties (previously only one) without additional conditions, making homeownership more tax-friendly.
🔹 Extended Time for Filing Updated Returns
The deadline for filing updated income tax returns has been increased from 2 years to 4 years, offering taxpayers a longer window to rectify any omissions or errors.
🔹 Higher Tax Deduction for Senior Citizens
The deduction limit under Section 80TTB for senior citizens has been doubled from Rs. 50,000 to Rs. 1 lakh, providing greater financial relief.
🔹 Increase in TDS Limit on Rent
The annual limit for TDS deduction on rent has been raised from Rs. 2.40 lakh to Rs. 6 lakh, reducing compliance hassles for tenants and landlords.
Income Tax Slab Revisions
A major highlight is the revision in tax slabs, particularly benefiting the middle class:
- Rs. 0 – Rs. 4 lakh: Nil
- Rs. 4 – Rs. 8 lakh: 5%
- Rs. 8 – Rs. 12 lakh: 10%
- Rs. 12 – Rs. 16 lakh: 15%
- Rs. 16 – Rs. 20 lakh: 20%
- Rs. 20 – Rs. 24 lakh: 25%
- Above Rs. 24 lakh: 30%
Business and Investment Reforms
- Certainty in taxation for electronics manufacturing, startups, and ship leasing units in IFSC.
- Tonnage Tax Scheme extended to cover inland vessels.
- Safe Harbour Rules expanded to reduce tax disputes in international transactions.
- Startups get a 5-year extension for incorporation to claim tax benefits.
Conclusion
The budget reflects a balanced approach, focusing on easing tax compliance for individuals and businesses while fostering economic growth. The revised tax slabs and compliance relaxations will significantly benefit the middle class, startups, and senior citizens.
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