Income Tax Rules 2025 : The Union Government has cleared way for significant tweaks in the Income Tax framework for FY 2025-26, offering a big relief to perhaps millions of taxpayers. In a tweak designed to reduce compliance complications and ease the financial burden of the middle class, the Central Board of Direct Taxes (CBDT) has declared that income from five key streams will be fully exempt from tax.
Be that as it may, this new exemption would reduce your tax burden if you are a salaried professional or a senior citizen or a freelancer. Let us see what is being exempted under the new rules and how it can help your personal finance.
Interest Income Up To 75,000 For Senior Citizens
Now, as per the new law, the senior citizens (above 60 years of age) can earn up to ₹75,000 in interest income from fixed deposits, savings accounts, or recurring deposits without paying income tax. Earlier, the amount was only up to ₹50,000, under Section 80TTB. For retirees who have to depend on interest for their daily expenses, this is an immense relief.
“The change takes inflation and rising cost of healthcare for seniors into account,” says Renu Malhotra, a retired bank manager from Delhi.
Agricultural Income, Still Fully Exempt
The government still provides for the full exemption of agricultural income, irrespective of the amount, as long as the income is genuinely generated out of agricultural operations on land situated in a rural area. This thus protects the farmers and rural families, especially considering an increase in input cost. However, non-taxable income arising from agricultural grounds has to be disclosed by the taxpayers in their returns for the sake of transparency.
Gifts Of Up To ₹1.5 Lakh Per Year (From Non-Relatives)
Earlier gifts above ₹50,000 were taxable if received from non-relatives. For years after 2025, the gift exemption limit has been increased to ₹1.5 lakh per year. This will help young earners, newlyweds, and freelancers as they usually get big support or gestures of goodwill from friends and acquaintances.
Please note: Gifts from relatives, as defined in the tax law, shall remain completely exempt, no matter the value.
Tax-Free Leave Travel Allowance (LTA) Every 2 Years
Salaried employees have good news! From now on, Leave Travel Allowances can be claimed every two years as against every four years earlier on tax-free basis if travel is within India and has all authorized traveling proofs of bookings, etc. This act may promote tourism within India and offer monetary relief to families that travel.
Digital Freelancer Income Upto ₹5 Lakh Credit
Recognizing the surge in gig economy activities and freelancing, mainly in Tier-2 and Tier-3 cities, the government has made it clear that digital freelancers-working in content writing, design, coding, or digital marketing-will be exempted from income tax up to ₹5 lakh. The income should be received through digital payment modes and be offered to tax under the appropriate head of income.
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