Income Tax Notification No. 05/2025

The Income Tax Department has issued the following notification regarding recent updates to income tax provisions:

Key Highlights:

1. Increase in Standard Deduction

   • The standard deduction for salaried individuals and pensioners has been increased from ₹50,000 to ₹60,000 for the financial year 2025-26.

2. Updated Tax Slabs Under New Regime

   • The revised tax slabs under the new tax regime are as follows:
     • Income up to ₹3,00,000 – Nil
     • ₹3,00,001 to ₹6,00,000 – 5%
     • ₹6,00,001 to ₹9,00,000 – 10%
     • ₹9,00,001 to ₹12,00,000 – 15%
     • ₹12,00,001 to ₹15,00,000 – 20%
     • Above ₹15,00,000 – 30%

3. Higher Deduction for Home Loan Interest

   • The deduction limit for interest on home loans under Section 24(b) has been increased from ₹2,00,000 to ₹2,50,000 for self-occupied properties.

4. TDS Exemption for Senior Citizens

   • Senior citizens (above 60 years) with annual income below ₹5,00,000 are now exempt from Tax Deducted at Source (TDS) on fixed deposit interest.

5. Penalty for Late ITR Filing Increased

   • The penalty for filing Income Tax Returns (ITR) after the due date has been increased:
     • ₹5,000 for delay up to 3 months.
     • ₹10,000 for delay beyond 3 months.

This notification is applicable from 1st April 2025. Taxpayers are advised to review their tax planning strategies accordingly.

For detailed guidelines, visit the official Income Tax website: www.incometax.gov.in