Finance Minister Nirmala Sitharaman’s Union Budget 2025 introduced several relief measures aimed at reducing the financial burden on the common people. When a Finance Minister presents the budget, the focus of the public is on how the announcements will benefit them financially. These benefits could come in the form of tax breaks, exemptions for investment schemes, tax exemptions on certain transactions, or tax benefits for retirement planning. Budget 2025 includes several such measures, with something for taxpayers, non-taxpayers, and people from all income groups. The budget features 9 key announcements that can help the common people save a significant amount of money.
Savings Announcements for Common People
1. No income tax on income up to ₹12 lakh
The Finance Minister has revised the new tax regime slab. The biggest change is that taxpayers with an annual income of up to ₹12 lakh will no longer have to pay income tax.
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2. TDS limit on rent increased
The annual TDS limit on rent has been raised from ₹2.40 lakh to ₹6 lakh. This is a major relief for individuals who rely on rental income for their livelihood.
3. Higher TDS limit for senior citizens
The tax deduction limit on interest for senior citizens has been increased from ₹50,000 to ₹1 lakh. This will greatly benefit elderly individuals, especially those dependent on FD income for their retirement.
4. Tax-free withdrawals from the National Savings Scheme
Withdrawals from the National Savings Scheme are now tax-free. Taxpayers under the old tax regime can still claim tax benefits on deposits of up to ₹1.50 lakh per financial year under Section 80C of the Income Tax Act, 1961.
5. Tax-free NPS Vatsalya withdrawals
Earlier, only regular NPS account holders had this benefit, but now it has been extended to NPS Vatsalya account holders as well. This initiative allows people to save significant tax on their retirement funds.
Union Budget 2025 Recap – India 🇮🇳
Key focus areas: Consumption, Consolidation, and Capex. Let’s break it down: 👇
1️⃣ Tax Relief for Middle Class
✅ No income tax for income up to ₹12 lakh
✅ More disposable income = boost in consumption, FMCG & auto sectors pic.twitter.com/otZYBsaJis— Amit Bhawani 🇮🇳 (@amitbhawani) February 1, 2025
6. Section 80CCD deduction for NPS Vatsalya contributions
Previously, a tax deduction of up to ₹50,000 under Section 80CCD(1B) was available only to NPS account holders. Now, this benefit has been extended to NPS Vatsalya account holders, allowing parents or guardians to claim this exemption. This deduction is in addition to the ₹1.50 lakh limit under Section 80CCE.
7. Removal of TCS on education-related remittances
The budget proposes the removal of TCS (Tax Collected at Source) on remittances made for educational purposes if the payment is made through a loan from a financial institution. This will benefit parents of students studying abroad.
8. Extended time limit for filing updated ITR
The time limit for filing updated Income Tax Returns (ITR) has been increased from 2 years (24 months) to 4 years (48 months) from the end of the relevant assessment year. This will help taxpayers avoid penalties and save money.
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This article discusses: BUDGET 2025: 8 Game-Changing Announcements to Help You Save Lakhs Annually—Know the Full Process