Budget 2025: From Crypto Tax to New Regime Defaults – Key Tax Reforms You Should Know

A recap of 10 transformative reforms in the last five Union Budgets that reshaped India’s tax landscape, simplifying compliance and addressing evolving economic challenges.

February 1, 2025: Union Finance Minister Nirmala Sitharaman is set to present the Union Budget 2025 tomorrow, marking her eighth consecutive budget presentation. Over the years, her budgets have introduced pivotal reforms aimed at simplifying taxation and fostering economic inclusivity. Here’s a quick look at the 10 key reforms implemented in recent Budgets that significantly impacted taxpayers.

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10 Key Reforms in Recent Budgets:

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1. Introduction of the New Tax Regime (2020):

In Budget 2020, a simplified, optional new tax regime was unveiled, offering concessional rates while removing certain deductions to streamline compliance.

2. New Regime Becomes Default (2023):

The new tax regime was made the default tax structure in Budget 2023, though taxpayers could still opt for the older regime if preferred.

3. Capital Gains Tax Overhaul (2024):

• Short-Term Capital Gains (STCG): Tax on STCG was increased to 20% (from 15%) for specified assets.
• Long-Term Capital Gains (LTCG): A new 12.5% rate was introduced for all assets, replacing the earlier 20% rate. The exemption limit for LTCG was raised to ₹1.25 lakh per year (up from ₹1 lakh).

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4. Reopening Assessments (2021):

The time limit for reopening tax assessments was reduced from six years to three. For cases involving concealment of income above ₹50 lakh, reopening was extended to 10 years.

5. Higher Standard Deductions (2024):

The standard deduction for salaried taxpayers was increased from ₹50,000 to ₹75,000. For family pensioners, the deduction rose from ₹15,000 to ₹25,000.

6. New Income Tax Slabs (2024):

• No Tax: Income up to ₹3 lakh.
• 5% Tax: ₹3–7 lakh.
• 10% Tax: ₹7–10 lakh.
• 15% Tax: ₹10–12 lakh.
• 20% Tax: ₹12–15 lakh.
• 30% Tax: Income above ₹15 lakh.

7. Higher Rebate Limits (2023):

The income limit for tax rebate eligibility under the new regime was increased from ₹5 lakh to ₹7 lakh, offering relief to more taxpayers.

8. Reduced Surcharge on High Income (2023):

The surcharge on incomes exceeding ₹5 crore was reduced from 37% to 25%, lowering the tax burden on ultra-high-net-worth individuals.

9. Updated Return Filing (2022):

A provision allowing taxpayers to file updated income tax returns within two years of the assessment year was introduced, enabling rectification of errors.

10. Crypto Taxation (2022):

The government imposed a 30% tax on profits from virtual digital assets and introduced 1% TDS on all crypto transactions.

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Impact on Taxpayers:

From rationalizing income tax slabs to simplifying compliance, these measures reflect efforts to align India’s tax system with modern economic realities. With Budget 2025 around the corner, taxpayers await further clarity on policies that promise financial relief and economic growth.

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Tags:

Budget 2025, Income Tax Reforms, New Tax Regime, Capital Gains Tax, Crypto Tax, Standard Deduction, Surcharge Reduction, Taxpayer Relief, Indian Economy