ITR Filing 2025: Know These 5 Key Changes Before Filing Your Income Tax Returns

Finance Minister Nirmala Sitharaman introduced many significant changes to the income tax framework in 2024. Sitharaman announced these changes as a part of the Union Budget in July earlier this year.

The changes announced by the Finance Minister are expected to impact the way taxpayers file their income tax returns in 2025. Here’s a look at some of the key changes announced this year which you must know about before you file your income tax returns in 2025:

Revision Of Income Tax slabs

The Finance Minister announced a change in the income tax slabs in 2024. The revised tax slabs under the New Tax Regime are aimed at increasing the savings of the taxpayers.

Annual income up to Rs 3 lakh is tax-exempt as per the revised tax slabs. Annual income ranging between Rs 3 lakh and Rs 7 lakh will be taxed at 5 per cent. Income between Rs 7 lakh and Rs 10 lakh will be taxed at 10 per cent. The tax rate for annual income above Rs 10 lakh and below Rs 12 lakh is 15 per cent after the revision. Annual income above Rs 12 lakh and below Rs 15 lakh will be taxed at 20 per cent. Annual income above Rs 15 lakh will be taxed at 30 per cent.

Increasing Standard Deduction

In order to make the New Income Tax regime more lucrative for taxpayers the standard deduction has been raised from Rs 50,000 to Rs.75,000. It must be noted that no new changes have been made to the old tax regime. The increased standard deduction will come into effect from FY 2024-25.

Higher Deduction Under Corporate NPS

The deduction limit under Section 80CCD(2) has been increased for employees covered under the Corporate National Pension System (NPS). The company’s contribution to corporate NPS has been increased to 14 per cent from 10 per cent.

Guidelines Related To Capital Gains Tax

The tax applicable on Short-Term Capital Gains (STCG) has been increased from 15 per cent to 20 per cent. The capital gains from assets such as gold and real estate will be taxed on the basis of the applicable tax slab.

The tax on Long-Term Capital Gains (LTCG) has also been increased to 12.5 per cent from 10 per cent. The tax exemption limit for LTCG has also been raised from Rs 1 lakh to Rs 1.25 lakh.

Changes In Holding Period For Capital Gains

The holding period for capital gains was also changed in 2024. If the holding period exceeds 12 months for listed securities the gains from such assets will be considered long-term. If the holding period is less than 12 months the gains will be categorised as short-term. For unlisted securities, the gains will qualify as long-term if the holding period is more than 24 months.

To conclude, knowing about these changes can aid you in tax planning and filing your income tax returns correctly.