Budget 2025 and your finances: Check this comprehensive guide for impact on salaries to crypto to rent | Mint

The Union Budget’s announcement of the new ₹12,00,000 tax slab has created quite a buzz, bringing cheer to many taxpayers. Alongside this, several tax rule changes are set to reshape personal finances. TCS rates on foreign trips, education loans, and other remittances have been simplified, offering some relief. From take-home salary adjustments and updates on rental income to changes in crypto regulations, this guide covers all the key budget announcements that will impact your financial planning and help you navigate these changes effectively.

New Tax Regime Vs. Old Tax Regime for year 25-26

The table compares income tax liabilities under the New Tax Regime and old tax regime for the Financial Years 2025-26, emphasizing the tax savings resulting from changes in tax rates and slabs. The income levels range from ₹9,00,000 to ₹5,00,00,000, with the tax payable for each year displayed side by side. Taxpayers benefit from reduced tax liabilities in FY 2025-26 due to adjustments in the tax slabs.

The tax savings are calculated as the difference between the taxes paid in FY 2025-26. Deductions of ₹4,25,000 are considered, including Section 80C ( ₹1,50,000), medical insurance under Section 80D ( ₹25,000), NPS contributions under Section 80CCD(1B) ( ₹50,000), and home loan interest under Section 24 ( ₹2,00,000).

Additionally, surcharge and cess play a key role in determining the final tax liability. A 10% surcharge applies for incomes above ₹50 lakhs, 15% for incomes above ₹1 crore, and 25% for incomes above ₹5 crore. Furthermore, a 4% Health and Education Cess is levied on the total tax, including any surcharge, making these changes an essential factor in reducing tax liabilities under the revised tax regime.

New Regime Comparison FY 24-25 & 25-26

The below table compares the income tax payable under the New Tax Regime for two financial years: FY 2024-25 and FY 2025-26, and shows how much tax is saved in the latter year.

Individuals with income up to ₹12 lakh will pay zero tax in FY 2025-26, resulting in full tax savings. Further, tax savings increase as income levels rise, with savings ranging from ₹36,400 to ₹1,43,000.

The table presents a comparison of income tax liabilities under the New Tax Regime for FY 2024-25 and FY 2025-26, highlighting the tax savings resulting from revised slab rates.

Note – Above all the incomes are after deducting the standard deduction of Rs. 50,000 for FY 2024-25 & Rs. 75,000 for FY 2025-26. Education Cess & Surcharge is added to the Tax amount as applicable.

For both the above calculation It is important to note that this calculation applies only to income taxed as per the standard income tax slabs and excludes earnings subject to special tax rates, such as Short-Term Capital Gains (STCG) and Long-Term Capital Gains (LTCG).

Key Changes in ULIP Investments

-High-Premium ULIPs to Face 12.5% Capital Gains Tax from April 2026

-The Budget has introduced capital gains taxation on high-premium ULIPs, effective April 1, 2026, bringing clarity on their tax treatment. ULIPs with annual premiums above ₹2.5 lakh will now be taxed as capital gains upon redemption, ensuring uniformity with equity mutual funds. The tax rate is 12.5% on LTCG (held >1 year) with a ₹1.25 lakh exemption and 20% on STCG (held <1 year).

Impact & Investor Advice

High-premium ULIPs are now less tax-efficient, while policies with premiums below ₹2.5 lakh remain tax-free under Section 10(10D). If you’re using ULIPs for tax savings, re-evaluate your approach as the new rules significantly alter theirtaxadvantage.

Key Changes & Impact on AIFs

-Capital Gains Taxation: Gains from the sale of securities by AIFs will now be taxed at 12.5%, significantly lowering the tax burden.

Example: If an AIF sells securities for ₹1 crore, making a profit of ₹20 lakh, it will now pay ₹2.5 lakh in tax (12.5%) instead of ₹6 lakh (30%) under the previous rule.

-TCS Removal: The Budget has eliminated the TCS provision that could have applied to securities transactions, reducing compliance and administrative burdens for AIFs.

Investor Takeaway

The new taxation rule makes AIFs more tax-efficient, aligning them with long-term investment strategies. The removal of TCS on securities sales further simplifies operations, making AIFs a more attractive investment vehicle.

Higher TCS Limits & Relief for Education Loans

The government has eased compliance by raising TCS thresholds and providing relief for foreign remittances.

Key TCS Changes

-Higher TCS Limit on Foreign Remittances: The threshold for TCS under the RBIs Liberalized Remittance Scheme (LRS) has been increased from ₹7 lakh to ₹10 lakh, reducing the tax burden for frequent international transactions.

-Education Loan Exemption: TCS has been fully removed for education-related remittances when funded through a loan from a recognized financial institution, making it easier for students to finance overseas education.

These changes simplify tax compliance and offer relief to individuals making international transactions for essential needs like education and medical expenses.

Tax Relief on 2 Self Occupied Properties

-Tax Benefits for Two Homes – Taxpayers can now avail benefits on two self-occupied properties instead of just one, reducing their tax burden and encouraging homeownership. Starting 1 April 2025, if a homeowner resides in their property or cannot occupy it due to any reason, its annual value will be considered nil.

-Earlier, claiming two properties as self-occupied required meeting specific conditions. However, Budget 2025 removes these restrictions, allowing homeowners to avoid taxation on deemed rental income for their second property. The table below illustrates potential tax savings for a second property, assuming a monthly rent of ₹30,000:

-Higher TDS Threshold on Rent – The TDS deduction limit on rental income has been raised from ₹2.4 lakh to ₹6 lakh per year. Now, TDS applies only if rent exceeds ₹50,000 per month, reducing compliance burdens for tenants and landlords.

Crypto Investors, Here’s What You Must Know

The Indian government has taken a tougher stance on crypto taxation and compliance in Budget 2025. A new section, 285BAA, has been introduced in the Income-tax Act, 1961, making it mandatory for investors to furnish details of their crypto transactions. Additionally, virtual digital assets (VDAs) have been included under the definition of undisclosed income, putting crypto gains in the same category as gambling and horse racing earnings for tax purposes.

Key Crypto Tax Rules & Compliance Updates

• Mandatory Reporting: Investors and entities dealing in VDAs must submit transaction details to the tax authorities.
• Inclusion in Undisclosed Income: Crypto trading profits can now be categorized under undisclosed income, which may lead to additional scrutiny.
• High Tax, No Set-Offs: Gains from crypto transactions remain taxed at 30%, with no provision to offset losses against other income. Additionally, a 1% TDS on every trade (Section 194S) continues to apply.
• Block Assessment Timeline: The time limit for assessing undisclosed income related to crypto transactions is 12 months from the end of the quarter in which the search or requisition was executed.

Investor Advice: Proceed with Caution

• Invest only if you truly understand crypto: Digital assets are highly volatile, and without proper knowledge, you risk losing money.
• Avoid meme coins and speculative assets: Hype-driven tokens often crash—don’t get caught in the trap of chasing quick gains.
• Know the tax implications: A flat 30% tax, 1% TDS, and no set-offs make crypto one of the most taxed asset classes in India.
• Limit exposure: Unless you’re an experienced investor, do not allocate more than 2-5% of your net worth to crypto.
• Beware of FOMO & social media hype: The greed for quick money drives many into high-risk, overhyped investments. Always remember what I said earlier about Dogecoin—”It can take you to the moon, but who will bring you back?”

For regular investors, crypto remains a complex and high-risk asset. If you don’t have time for stock market investing, it’s even riskier to jump into crypto based on hype. Invest wisely, stay informed, and avoid speculativetraps.

Other Changes

NPS Vatsalya: Now eligible for a tax exemption, including an additional deduction of up to ₹50,000 under Section 80CCD(1B) (old tax regime). 60% of withdrawals will be tax-free, while 40% must be used for annuity—clarifying earlier uncertainties.

NSS Withdrawals: From August 29, 2024, withdrawals from the National Savings Scheme will be tax-exempt for both principal and interest where deductions were previously claimed.

Updated ITR Filing: The window for filing updated ITRs is now extended to 4 years from the relevant assessment year, up from the previous 2 years.

The writer, a Chartered Accountant and founder of NRP Capitals, works with chairmen, founders, HNIs, and UHNIs in the realm of private wealth.