Changes in Tax Policy 2025: Impact on Individuals & Businesses

Budget 2025 introduced notable changes in tax policy. The new budget will affect both individuals and businesses. The goal of these revisions is to improve the efficiency and equity of the tax system. It promotes investment in the nation and provides taxpayers with more relief. 

Here is the tax rate under the new tax policy:

• The basic exemption limit has been raised from ₹3 to ₹4 lakh

• Annual taxable income of up to ₹4 lakh will have no tax liability

• The income threshold for availing a full tax rebate has increased from ₹7 lakh to ₹12 lakh

• Taxpayers earning up to ₹12 lakh annually will not pay any income tax

• The tax rebate does not apply to income taxed at special rates, such as capital gains

The Union Budget 2025 did not propose any revisions to the corporate taxation rates or policy. 

The revised income tax structure includes seven tax slabs listed in the table below. The updated structure of the new tax regime is here.