Year Ender 2025: What changed for taxpayers in 2025? From tax slabs to ITR and capital gains, here are the changes

The year 2025 was different in many ways for taxpayers. Changes were made to income tax rules, and new developments emerged regarding tax slabs and rebates. Let's learn about these major changes...

Year Ender 2025: The year 2025 was different in many ways for taxpayers. Changes were made to income tax rules, and new developments emerged regarding tax slabs and rebates. This directly impacted the pockets of ordinary people. Meanwhile, due to technical difficulties while filing their ITR, many people had to wait for their refunds, which increased their problems.

The year 2025 is now coming to an end. Before entering the new year, it is important to know about these changes so that we can better prepare for our tax planning in the coming times. Let's learn about these major changes...

1. The Central Government changed tax slabs

The central government took a historic decision to change the tax slabs to provide relief to the middle class. In the 2025 Union Budget, the tax-free income limit was increased.

According to the new tax slab, the rebate limit has been increased to Rs. 12 lakh. This means that salaried individuals will not have to pay tax on income up to Rs. 12.75 lakh after standard deduction.

2. Changes made to ITR forms

Due to structural changes and system updates in the ITR forms, many taxpayers experienced delays in receiving refunds. More difficulties were faced in income cases related to capital gains from mutual funds, shares, and property. This caused problems for taxpayers.

3. Major change in Income Tax law

One of the biggest changes of 2025 includes the new Income Tax Act. This law will replace the nearly 60-year-old Income Tax Act, 1961, and will be implemented from April 1, 2026. The new law emphasizes simplifying the tax system so that ordinary taxpayers can easily understand the rules.

4. Changes to Capital Gains Tax Rules

The government made significant changes to capital gains tax in 2025.  The tax on short-term capital gains on equities was increased from 15 percent to 20 percent. Meanwhile, the tax-free limit for long-term capital gains was raised to ₹1.25 lakh.

5. GST Reforms Announced

The central government launched GST 2.0, deciding to implement major changes to the indirect tax system. The announcement of reduced GST rates on several essential items under the GST reforms received considerable attention.