If your total yearly income is below Rs 12 lakh, you pay nothing. Salaried employees get an extra Rs 75,000 standard deduction on top, which pushes the effective zero-tax limit to Rs 12.75 lakh. The new regime remains the default — if you don’t actively pick the old one while filing, you automatically fall under the new system.
The Old Tax Law Gets a Makeover
The Income Tax Act of 1961 is being replaced by the Income Tax Act, 2025. Decades of additions had bloated the law to over 500 sections. The new version brings that down to 333. The tax itself hasn’t changed — just the language and structure around it, making it easier for ordinary people to read and understand.
Share Buybacks and Stock Traders Face New Rules
Money received from company share buybacks will now be treated as capital gains instead of dividend income. This means the tax you pay depends on how long you held the shares. Separately, Securities Transaction Tax on futures is going up from 0.02 percent to 0.05 percent, so active derivatives traders will pay slightly more per trade.
More Cities, Bigger HRA Relief
Bengaluru, Hyderabad, Pune, and Ahmedabad have been added to the list of cities where you can claim a 50 percent HRA exemption — a benefit that was earlier limited to Delhi, Mumbai, Chennai, and Kolkata. If you are a salaried person paying rent in any of these cities, your tax-free house rent allowance just got a meaningful bump.
