Comprehensive Guide to Filing Income Tax Returns for Individuals in India: FY 2024-25 (AY 2025-26)
As the extended deadline for filing Income Tax Returns (ITR) approaches on September 15, 2025, for most individual taxpayers, it’s crucial for salaried professionals, freelancers, and other income earners to understand the nuances of the process under the Income Tax Act, 1961. With recent updates from the Union Budget 2025, including revised tax slabs under the new regime and enhanced standard deductions, filing your ITR for Financial Year (FY) 2024-25 (Assessment Year 2025-26) has become more taxpayer-friendly but requires careful attention to exemptions, deductions, and form selection. This article serves as a complete guide, drawing from official sources, to help individuals navigate the ITR filing landscape efficiently.
Understanding the Tax Regimes: Old vs. New
India offers two tax regimes for individuals, each with distinct implications for exemptions and deductions. The choice between them is irreversible once selected in the ITR, so evaluate based on your income and eligible benefits.
- Old Tax Regime: Retains traditional tax slabs and allows a wide array of deductions and exemptions under Chapter VI-A and Section 10 of the Income Tax Act. Tax slabs remain unchanged:
- Up to ₹2.5 lakh: Nil
- ₹2.5 lakh to ₹5 lakh: 5%
- ₹5 lakh to ₹10 lakh: 20%
- Above ₹10 lakh: 30%
A rebate under Section 87A up to ₹12,500 makes income up to ₹5 lakh effectively tax-free. This regime suits those with significant investments or expenses qualifying for deductions.
New Tax Regime (Default under Section 115BAC): Introduced in 2020 and refined in Budget 2025, it features lower rates but foregoes most deductions and exemptions. Key updates for FY 2024-25 include:
- Revised slabs:
- Up to ₹4 lakh: Nil (increased from ₹3 lakh)
- ₹4 lakh to ₹7 lakh: 5%
- ₹7 lakh to ₹10 lakh: 10%
- ₹10 lakh to ₹12 lakh: 15%
- ₹12 lakh to ₹15 lakh: 20%
- Above ₹15 lakh: 30%
- Enhanced rebate under Section 87A up to ₹25,000, making income up to ₹12 lakh tax-free (₹12.75 lakh for salaried with standard deduction).
- Limited deductions available: Standard deduction of ₹75,000 (up from ₹50,000), deduction for family pension up to ₹25,000, employer contributions to NPS under Section 80CCD(2), and deductions for additional employee costs under Section 37(1). No HRA, 80C, or 80D benefits here.
Opt for the new regime if your deductions are low; otherwise, the old regime could save more tax. Use the Income Tax Department’s online comparator tool to decide.
Who Needs to File an ITR?
Under Section 139 of the Income Tax Act, individuals must file if:
- Gross total income exceeds the basic exemption limit (₹2.5 lakh old regime, ₹4 lakh new regime, before deductions).
- You have foreign assets or income.
- You’ve deposited ₹1 crore+ in current accounts or spent ₹2 lakh+ on foreign travel or ₹1 lakh+ on electricity.
- You’re a resident with signing authority in foreign accounts.
Even if income is below thresholds, filing is advisable for refunds or carrying forward losses.
Choosing the Right ITR Form
| ITR Form | Eligibility Criteria | Key Income Sources |
|---|---|---|
| ITR-1 (Sahaj) | Resident individuals (not ordinarily resident) with total income ≤ ₹50 lakh. Not for directors, unlisted equity holders, or foreign income/assets. | Salary, one house property, other sources (interest, dividends), agricultural income ≤ ₹5,000, capital gains u/s 112A ≤ ₹1.25 lakh. |
| ITR-2 | Individuals/HUFs not eligible for ITR-1, without business/profession income. | Salary, multiple house properties, capital gains, other sources, foreign income/assets. |
| ITR-3 | Individuals/HUFs with business/profession income (not presumptive). | All sources including business/profession profits. |
| ITR-4 (Sugam) | Resident individuals with total income ≤ ₹50 lakh under presumptive taxation (Sections 44AD/44ADA/44AE). | Business/profession (presumptive), salary, one house property, other sources, agricultural ≤ ₹5,000. |
Key update: Individuals born after April 1, 2007, cannot file ITR-1. Always verify eligibility on the e-filing portal.
Documents Required
Gather these before filing:
- PAN and Aadhaar (linked).
- Form 16 (from employer for salary TDS).
- Form 16A/16B/16C (TDS on other income).
- Bank statements, interest certificates.
- Investment proofs (for deductions: PPF, ELSS receipts under 80C).
- Home loan interest certificate (Section 24).
- Form 26AS (tax credit statement) and Annual Information Statement (AIS) for pre-filled data.
- Capital gains details (sale of assets).
Add Your Heading Text Here
Filing is mandatory online via the e-filing portal (incometax.gov.in) for most individuals. Here’s how:
- Register/Login: Use PAN as user ID; register if new. Link Aadhaar for OTP verification.
- Select Assessment Year: Choose AY 2025-26 and filing mode (online/offline utility).
- Choose ITR Form: Based on eligibility; pre-filled data from AIS/Form 26AS auto-populates.
- Fill Details: Enter income under heads (salary, house property, capital gains, business, other sources). Compute total income, claim exemptions/deductions, and select regime.
- Compute Tax: Apply slabs, rebate, and pay any self-assessment tax via net banking/challan.
- Verify Return: e-Verify within 30 days via Aadhaar OTP, net banking, or DSC. Physical verification is rare.
- Submit: Get acknowledgment (ITR-V). Track status on the portal.
For offline: Download Excel/JSON utility, fill, generate XML/JSON, upload. Common pitfalls: Mismatch with Form 26AS leads to notices.
Key Exemptions to Consider (Under Section 10)
Exemptions reduce taxable income and are available mainly in the old regime:
- House Rent Allowance (HRA): Least of actual HRA, 50%/40% of salary (metro/non-metro), or rent minus 10% of salary.
- Leave Travel Allowance (LTA): Actual travel cost for two trips in four years, domestic only.
- Standard Deduction: ₹50,000 on salary (old regime); ₹75,000 (new regime).
- Gifts/Vouchers: Up to ₹5,000 tax-free from employer.
- Agricultural Income: Fully exempt but aggregated for rate purposes if > ₹5,000.
- Other Allowances: Transport (₹1,600/month), children’s education (₹100/child/month), etc.
In the new regime, most are unavailable except employer NPS contributions.
Deductions to Maximize Savings (Old Regime Only)
Deductions under Chapter VI-A cap taxable income:
- Section 80C/80CCC/80CCD(1): Up to ₹1.5 lakh for PPF, EPF, ELSS, life insurance, tuition fees, home loan principal.
- Section 80D: Up to ₹25,000 (self/family) + ₹25,000 (parents) for health insurance; ₹50,000 for seniors. Preventive check-ups: ₹5,000.
- Section 80E: Interest on education loans (no limit, up to 8 years).
- Section 80G: 50%/100% on donations to eligible funds (e.g., PM CARES).
- Section 80TTA/80TTB: ₹10,000 on savings interest (₹50,000 for seniors).
- Section 24(b): Up to ₹2 lakh on home loan interest (self-occupied property).
- Section 80CCD(1B): Additional ₹50,000 for NPS
Total deductions can exceed ₹2 lakh, but track limits. New regime allows only select ones like NPS employer contribution (up to 14% of salary).
Deadlines, Penalties, and Late Filing
- Original Deadline: July 31, 2025 (extended to September 15, 2025, for non-audit cases due to technical glitches and budget changes).
- Audit Cases: October 31, 2025.
- Belated/Revised ITR: December 31, 2025 (late fee ₹1,000-₹5,000; no loss carry-forward in new regime).
Penalties for non-filing: Up to 50% of tax due under Section 270A, plus interest at 1% per month under Section 234A. File early to avoid rushes.
Common Mistakes to Avoid
- Not reconciling with AIS/Form 26AS, leading to defective notices.
- Forgetting to e-verify, invalidating the return.
- Incorrect regime selection without comparing tax liability.
- Missing disclosures for foreign income or high-value transactions.
- Claiming ineligible deductions (e.g., 80C beyond ₹1.5 lakh).
Consult a CA for complex cases like capital gains or business income.
Conclusion
Filing ITR for FY 2024-25 is not just compliance but an opportunity to claim refunds and plan finances. With the new regime’s ‘nil tax’ up to ₹12 lakh and extended deadlines, more individuals can file stress-free. Visit incometax.gov.in for tools and helplines. Remember, accurate filing builds a strong financial profile—start today!
IMPORTANT NOTE : This article is for informational purposes; consult official sources or professionals for personalized advice.
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