BUDGET 2025-26 FROM EXAM PERSPECTIVE| By Parmar Sir

Summary

This video explains the key changes in the 2025 budget, highlighting adjustments in tax laws and deductions. It covers increases in the tax deduction limit for seniors, higher thresholds for TDS on rent and TCS on foreign transactions, and shifts in exemptions for income tax, specifically targeting senior citizens. The video also touches on the merger of the Railway and General Budgets, a significant shift in the Indian budget process. It aims to clarify these tax reforms and their impacts on everyday taxpayers, especially landlords and senior citizens.

Takeaways

• 😀 The gross income limit for tax exemption is ₹12 lakh, with a standard deduction of ₹75,000.
• 😀 There is no income tax up to ₹12 lakh, so the TDS (Tax Deducted at Source) limit will be zero for that amount.
• 😀 TDS on rent has been increased, with the new threshold set at ₹6 lakh (up from ₹5 lakh previously).
• 😀 TDS is the tax deducted at the source of income, like rent or salary, where the payer is responsible for deducting and paying the tax.
• 😀 TCS (Tax Collected at Source) is applicable when sending money abroad for things like travel or education. The sender must deduct TCS and remit it to the government.
• 😀 The higher interest deduction limit for senior citizens has been increased from ₹50,000 to ₹1 lakh.
• 😀 TDS deductions can be availed when filing taxes, helping reduce the overall payable amount.
• 😀 TCS is an advance payment of tax when transferring money abroad, ensuring the government receives tax upfront on these transactions.
• 😀 The Railway Budget and the General Budget used to be separate; they were merged into a single budget at a specific point in history.
• 😀 The speaker invites viewers to comment on when the Railway Budget and General Budget were merged and their views on the changes.

Q & A

What is the standard deduction for individuals with an income of Rs 12 lakh?

The standard deduction for individuals with a gross income of Rs 12 lakh is Rs 75,000.

What is the significance of net income in the context of taxation?

Net income refers to the taxable income, which is the amount that is subject to taxation after accounting for deductions and exemptions.

What is TDS (Tax Deduction at Source), and how does it apply to rental income?

TDS is tax deducted at the source of income, such as rent payments. If the rent income exceeds a specified threshold, the payer is required to deduct TDS before giving the amount to the landlord, and the deducted amount is remitted to the government.

How has the TDS limit for rent payments changed?

The TDS limit for rent payments has been increased from Rs 2.4 lakh to Rs 6 lakh.

What is TCS (Tax Collection at Source), and when does it apply?

TCS is the tax collected at the source of certain payments, such as when sending money abroad for purposes like travel or education. The sender is responsible for deducting the tax and remitting it to the government.

How has the deduction limit for senior citizens’ interest income changed?

The deduction limit for senior citizens earning interest income has been increased from Rs 50,000 to Rs 1 lakh.

What happens if TDS is deducted but the taxpayer still pays taxes?

If TDS is deducted from income, the taxpayer can avail of this deducted amount as a credit while filing their tax returns, offsetting their overall tax liability.

Why is the concept of TDS important for landlords receiving rental income?

TDS ensures that tax is collected at the point of payment, which helps the government secure tax revenue upfront and reduces the burden on landlords when they file their tax returns.

What happens to TCS when money is sent abroad for education or travel?

When sending money abroad for purposes like education or travel, TCS is deducted at the source, meaning the person sending the money must remit a tax amount to the government before sending the full payment.

When were the Railway Budget and the General Budget merged?

The Railway Budget and the General Budget were merged in 2017, after which both budgets are presented together as one unified budget.