By Mr. Abhay Ray 
Key Tax and Financial Changes for FY 2025-26 : What You Need to Know
As the new financial year begins on April 1, 2025, India witnesses several crucial updates to tax policies and financial regulations. These changes, announced as part of the Budget 2025, are aimed at streamlining compliance, simplifying taxation, and providing relief to taxpayers across various income brackets. Whether you’re a salaried employee, an investor, or a senior citizen, the latest revisions have the potential to impact your financial planning and tax liabilities. Here’s an overview of some of the most significant changes that come into effect from April 1, 2025.
- Revised Income Tax Slabs – A Progressive Approach
One of the most significant changes in Budget 2025 is the overhaul of the income tax slabs under the new tax regime. The revised structure aims to ease the tax burden on middle-income groups while making tax compliance simpler for everyone.
- Income up to ₹ 4 lakh: No tax
- ₹ 4,00,001 to ₹ 8 lakh: 5%
- ₹ 8,00,001 to ₹ 12 lakh: 10%
- ₹ 12,00,001 to ₹ 16 lakh: 15%
- ₹ 16,00,001 to ₹ 20 lakh: 20%
- ₹ 20,00,001 to ₹ 24 lakh: 25%
- Above ₹ 24 lakh: 30%
What stands out is the introduction of zero tax on income up to ₹ 12 lakh. Individuals opting for the new tax regime will not have to pay any tax if their total income is ₹ 12 lakh or lower. The government has made it even more taxpayer-friendly by ensuring that salaried individuals benefit from a standard deduction of ₹ 75,000, making the income up to ₹ 12.75 lakh entirely tax-free.
This move is a significant step towards promoting greater purchasing power, particularly among the middle class, and encouraging both household savings and consumer spending.
Further, the introduction of marginal relief ensures that individuals earning slightly over ₹ 12 lakh will only pay tax on the excess income, thereby preventing the “tax shock” that usually occu₹ with small income increases.
- Changes to TDS and TCS Limits – Greater Relief for Senior Citizens and Investor
To further reduce the tax burden and simplify financial transactions, the government has revised the Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) limits. Notable changes include:
Senior citizens now enjoy an increased TDS threshold on bank interest, which has been raised from ₹ 50,000 to ₹ 1 lakh. This gives them more flexibility and reduces their tax compliance burden. For other taxpayer, the TDS threshold on bank interest has also been increased to ₹ 50,000.The TDS limit on dividend income has been raised to ₹ 10,000, doubling the previous threshold.
The TCS threshold for overseas remittances has been increased from ₹ 7 lakh to ₹ 10 lakh, providing more freedom for those sending money abroad under the Liberalized Remittance Scheme. These revisions are designed to ensure greater liquidity for taxpayer, making it easier for both senior citizens and investor to manage their finances.
- Simplified Tax Calculation for Self-Occupied Properties
For those with self-occupied properties, calculating annual value for tax purposes has become simpler. Taxpayer can now declare the annual value of up to two self-occupied properties as zero, effectively eliminating tax on these properties. This change helps simplify the filing process for homeowners and reduces the tax compliance load for those with multiple properties.
- Changes to GST, Toll Rates, and Digital Transactions
Along with income tax revisions, other important regulatory changes are also set to impact taxpayer. One of the most notable is the mandatory multi-factor authentication for the GST portal. This security measure ensures better protection against cyber threats and secures sensitive financial data.
In addition, toll taxes for national highways have been increased by approximately 3%, which will affect travellers across various expressways and toll plazas. For example, the toll between Delhi and Meerut will rise by ₹ 5 to ₹ 170 for car and jeeps, while heavier vehicles like trucks will face higher tolls, increasing operational costs for transport businesses.
- Scrapping of Equalisation Levy – A Boost for Digital Transactions
Another significant change in Budget 2025 is the scrapping of the equalisation levy on digital transactions. Introduced in 2020, this levy imposed a charge on e-commerce operators and digital service provide₹. However, starting in April 2025, the 2% charge on e-commerce operators and 6% on online advertisements will be abolished. This move aims to simplify digital transactions and attract more foreign investment into India’s digital economy, further boosting the growth of the e-commerce and tech sector.
- Changes to Credit Card Perks and SBI’s New Policies
Credit card holders are in for a change, particularly with SBI Cards. Starting July 26, 2025, SBI credit cardholders will no longer receive complimentary insurance coverage (₹ 50 lakh for air accidents, ₹ 10 lakh for rail accidents). Additionally, the rewards program will see a reduction, with customers earning just 5% rewards per ₹ 100 spent, down from the previous 15%.
Other banks like Axis Bank are also adjusting their offerings, including the scrapping of certain premium benefits and milestone rewards for frequent traveler. If you rely on such perks, it might be a good time to reassess your credit card strategy and explore alternative options.
- KYC Verification for Mutual Funds and Demat Accounts
To tighten security and reduce financial fraud, the government has mandated that KYC verification will be compulsory for all mutual fund and demat accounts. As part of this process, nominee details will also be re-verified, ensuring that all accounts are compliant with the latest security standards.
Conclusion – A Year of Financial Reforms
April 1, 2025, in a wave of significant changes aims to simplify tax compliance, enhance digital security, and make the financial ecosystem more transparent. Whether you’re an individual taxpayer, investor, or business owner, understanding these new rules is essential to ensure you make the most of the tax benefits and avoid unnecessary penalties. Keep an eye on the evolving financial landscape and stay updated with the latest changes to optimize your financial strategies for the year ahead.
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