Budget 2025: What The Tax Changes Mean For Equity Investors And Seniors

The biggest takeaway for customers from Budget 2025 is the fact that there will no tax up to “normal” incomes of Rs 12 lakh, excluding capital gains? “This limit will be Rs12.75 lakh for salaried tax payers, due to standard deduction of Rs75,000,” said Finance Minister Nirmala Sitharaman in her Budget 2025-26 speech.

What It Means For Equity Investors

What this also means is individuals and retail investors who invest in equities regularly will be paying capital gains separately if they book profits. These profits will not be combined with their overall income.

The best strategy, therefore, remains the same. Invest for the long term and don’t churn your mutual funds and stocks portfolio too often, unless warranted.

Since the minister said that this limit will apply only on those with “normal” income, even if the overall income, including capital gains, is under Rs 12 lakh, only the “normal” income portion will be subjected to the Rs 12 lakh limit. Clarity is still awaited on that front.

Focus On Seniors

The increased focus on seniors is heartening, especially for Outlook Money, which has a dedicated platform to cater to the needs of the seniors and those planning for their retirement. Our dedicated event Outlook Money 40 After 40 is round the corner on February 7^th and 8^th, at Jio World Centre in Mumbai. The event is largely editorially driven in terms of the concept and knowledge sessions, which can give you key insights on how to plan for your retirement as well as has takeaways for senior citizens attending the event.

The new changes are tax deduction at source (TDS) relief on the interest of deposits by seniors. It has been extended from Rs50,000 to Rs 1 lakh. It may be noted that a lot of seniors in India still prefer to keep their retirement corpus in bank deposits where they earn interest that is deductible under Section 80TTB of the Income-tax Act, 1961.

Tax-exempt withdrawal for National Savings Schemes (NSS) for very old accounts of senior and very senior citizens and NPS Vatsalya are other big changes. NPS Vatsalya scheme was launched last year, which is meant for starting a retirement corpus for children by the parents. The uptake has not been much, but an expert in one of the sessions I held at Outlook Money was confident that it will grow as Indians are usually easier convinced when it comes to saving for their children rather than themselves.

As expected, the new tax regime seems to be the future of taxation in India because the FM steered clear of making any changes to the old tax regime.

For Union Budget 2025 Live, Read Here.