ITR filing in 2025: Know all key income tax rules and changes made in 2024

As the calendar year of 2024 concludes, 2025 is set to bring significant income tax reforms that were introduced in the Union Budget 2024-25 and further refined in July 2024. Moreover, these key changes and rules are likely to impact taxpayers when filing their income tax returns (ITR) in July 2025.

Here is a list of all major changes to ITR filing in 2025 and their possible impact on the average taxpayer.

Income Tax Slabs:

In 2024, the government revised the income tax slabs under the new tax regime as follows:

• Up to Rs 3 lakh: Nil
• Rs 3-7 lakh: 5%
• Rs 7-10 lakh: 10%
• Rs 10-12 lakh: 15%
• Rs 12-15 lakh: 20%
• Above Rs 15 lakh: 30%

Standard Deduction Limit:

The standard deduction limit under the new tax regime has also been increased from Rs 50,000 to Rs 75,000 for salaried employees, and from Rs 15,000 to Rs 25,000 for family pensioners.
Meanwhile, the old tax regime remains unchanged with standard deduction limits of Rs 50,000 for salaried individuals and pensioners, and Rs 15,000 for family pensioners.

Capital Gains Taxation:

Short-term capital gains (STCG) on equity and equity-oriented mutual funds will be taxed at 20%, up from 15%. Long-term capital gains (LTCG) will be taxed at 12.5%, and the exemption threshold for LTCG has been raised to Rs 1.25 lakh from Rs 1 lakh.
Meanwhile, the indexation benefit for LTCG on property sales has been removed.

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Securities Transaction Tax (STT):

The STT on equity derivatives has been increased, with options taxed at 0.1% of the premium and futures at 0.02% of the traded price.

Taxation of Share Buybacks:

From October 1, 2024, share buybacks are taxed as income for individual shareholders, similar to dividends, rather than the company paying the tax.

Higher Deduction on Employer's NPS Contribution:

Under the new tax regime, individuals can now claim a deduction of up to 14% of their basic salary for their employer's contribution to the National Pension System (NPS), up from 10%.

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TDS Changes:

The government also rationalized the multiplicity of TDS rates on different incomes. However, this rationalization has been done for some incomes only, excluding salary, virtual digital assets, and others.
Payment in respect of insurance policy (Section 194DA), commission on sale of lottery tickets (Section 194G), commission or brokerage (Section 194H), and payments by individuals or HUFs (Section 194M) will also be taxed at 2% effective October 1, 2024.

Claiming TDS/TCS Tax Credit:

Salaried employees can now claim credit for tax deducted on other incomes and tax collected at source from other expenses against TDS from salary income. This helps avoid cash flow issues.

Allowing TCS Credit to Others:

To ease cash crunches, persons other than the collectee can claim TCS credit, benefiting scenarios like parents paying tuition for children abroad.

TDS on Sale of Property: TDS on property sales must now be deducted from the total payment if it exceeds Rs 50 lakh, even if individual shares are less.

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Vivad se Vishwas Scheme 2.0:

Under this scheme, taxpayers can pay the disputed tax amount plus a specified percentage, and the Income Tax Department will waive any additional penalties and interest.

Changes in Holding Period for Capital Gains:

The holding period for capital gains has been simplified to 12 months for listed securities and 24 months for non-listed securities to qualify as long-term capital gains.

Aadhaar Number Requirement:

Effective October 1, 2024, individuals must quote their Aadhaar number in income tax returns and PAN applications. Aadhaar enrolment numbers will no longer be accepted.

Disclaimer: Tax laws are subject to change. Readers are advised to consult official government notifications or trusted financial advisors for the most accurate and up-to-date information