Budget 2025 has finally been announced by Finance Minister Nirmala Sitharaman on Saturday, Feb 1, 2025.  From income tax to capital gains tax, Goods and Services Tax (GST), and Securities Transaction Tax (STT), each tax plays a role in shaping the financial landscape for individuals and businesses. Here’s a breakdown of current state of key tax rates after the Budget.

Income tax is imposed on individual earnings based on government-defined income slabs. The FM has announced changes to the new income tax regime:

• New Regime: No tax for annual income up to ₹3 lakh. Tax rates increase progressively from 5% (₹3-6 lakh) to 30% (income above ₹15 lakh).
• Old Regime: Exemption for income up to ₹2.5 lakh. 5% tax for ₹2.5-5 lakh, 20% for ₹5-10 lakh, and 30% for income exceeding ₹10 lakh. A ₹12,500 rebate is available for those earning up to ₹5 lakh.

Capital Gains Tax (CGT):
CGT is applied to profits from asset sales, divided into short-term and long-term categories:

• Short-term Capital Gains (STCG): 15% tax on equities held for less than a year.
• Long-term Capital Gains (LTCG): 10% tax on profits exceeding ₹1 lakh from equities held over a year.

Securities Transaction Tax (STT):
STT is levied on stock exchange transactions:

• Equity Delivery: 0.1% on both buy and sell.
• Equity Intraday: 0.025% on the sell side.
• Equity Futures: 0.01% on the sell side.
• Equity Options: 0.017% on the sell side (premium).
• Mutual Fund Units (Equity-Oriented): 0.001% on the sell side.

Goods and Services Tax (GST):
GST is an indirect tax on goods and services, with primary slabs at 0%, 5%, 12%, 18%, and 28%. There are lower rates for specific sectors and for composition taxpayers, who pay GST at reduced rates of 1.5%, 5%, or 6%. Additionally, Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) rates are set at 2% and 1%, respectively.

Other Taxes:

• Excise Duty: Imposed on the manufacture of goods, particularly for petroleum and tobacco products.
• Customs Duty: Levied on imported goods, with rates varying by product category.
• Professional Tax: State governments impose this on professions, trades, and employment, capped at ₹2,500 annually in most states.

This comprehensive tax system aims to balance revenue generation with consumer affordability, making India’s tax landscape dynamic and complex.

Also Read: Will Budget 2025 ease the tax burden? Hopes rise for middle-class relief