15 Key Income Tax Rule Changes In 2024 To Note In 2025 When Filing For ITR Before July 31st Deadline

Income Tax Return (ITR): Once again salaried individuals will be required to file their income tax return (ITR) before the deadline for assessment 2025-26 which is meant for the financial year FY25. For AY 2025-26 ITR filing, the deadline is July 31st. The Income Tax Department has also extended the deadline to file belated or revised ITR for FY24 which has the assessment year 2024-25, to January 15. There are some 15 key changes in income tax rules that need to be kept in check in 2025 when filing ITR. Here's what they are:

1. New Tax Regime:

For FY25 income tax return filing, the government has revamped the tax rates on different income tax slabs, which further allows annual savings of up to Rs 17,500.

The new slabs for FY25 are:

• No Tax On Salary Up To Rs 3,00,000
• 5% Tax Rate On Salaries From Rs 3,00,001 To Rs 6,00,000
• 10% Tax Rate On Salaries From Rs 6,00,001 To Rs 9,00,000
• 15% Tax Rate On Salaries From Rs 9,00,001 To Rs 12,00,000
• 20% Tax Rate On Salaries From Rs 12,00,001 To Rs 15,00,000
• 30% Tax Rate From Salaries Above Rs 15,00,000.

2. Standard Deduction Limit Raised:

In the Union Budget 2024, Finance Minister Nirmala Sitharaman increased the standard deduction for salaried individuals to Rs 75,000 from Rs 50,000. Whole family pensioners can get a standard deduction of up to Rs 25,000 from earlier Rs 15,000.

3. High Tax Relief In NPS Contribution:

Also, in Budget 2024, the government increased tax deduction to 14% from the earlier 10% on employers' contributions in the national pension scheme (NPS) account for salary (basic + DA). However, the benefit is applicable to employees under the new tax regime.

4. Tax Rates On Capital Gains Revised:

Now, short-term capital gains attract a 20% tax rate from the earlier 15%. Long-term capital gains are exempted up to Rs 1.25 lakh from earlier Rs 1 lakh on equity-oriented mutual funds. Lastly, under the tweaked Finance Bill 2024, now, the government is offering LTCG of 12.5% on assets like real estate and gold under the new tax regime, with an option to choose from the old tax regime where a 20% indexation rate is already offered for houses purchased before July 22, 2024.

5. Holding Period For Capital Gains Revised:

The government has also revised the holding periods for market-related instruments that would define short-term and long-term capital gains. Long-term gains are now for 12 12-month holding periods for listed securities. For unlisted securities, long-term gains are determined on 24 24-month holding period or after.

6. TDS Rates Rationalized:

Tax deducted at source (TDS) rates have been modified on various parameters. TDS rate is now at 2% each on insurance commission (non-company) and payment of rent by individual or HUF. While there is a TDS of 0.1% on e-commerce transactions.

7. Ease in Claiming Credit for TCS Collected/TDS Deducted for Salaried Employees

In October last year, the Central Board of Direct Taxes (CBDT) amended income-tax rules for ease in claiming credit for TCS collected/TDS deducted for salaried employees and enabling claiming TCS credit of minors in the hands of parents.

8. TCS Credit Transfer:

With effect from January 1, 2025, the government has now allowed parents to claim tax collected at source (TCS) on funds remitted to minors under the RBI's Liberalized Remittance Scheme. The RBI's scheme states that all resident individuals, including minors, are allowed to freely remit up to USD 2,50,000 per financial year (April - March) for any permissible current or capital account transaction or a combination of both. Further, resident individuals can avail of foreign exchange facilities within the limit of USD 2,50,000 only.

9. Buyback Shares Taxation:

The income received on the buyback of shares in the hands of the recipient is to be taxed. The tax rates will be applicable as per the income class. Earlier, companies paid a Dividend Distribution Tax (DDT) of 20% on buybacks.

10. Securities Transaction Tax (STT).

With effect from 1 October 2024, the Securities Transaction Tax (STT) on futures is raised to 0.02% from 0.0125%, while STT on options has been increased from 0.0625% to 0.1%. The announcement was made in the Budget.

11. TDS Delay?

As per the new rule after Budget 2024, the delay for payment of TDS up to the due date of filing the statement is decriminalized.

12. TCS On Luxury Goods:

In Budget 2024, section 206C of (1F) was amended, under which now, the government is levying TCS on luxury goods whose value exceeds Rs 10 lakh. This has come into effect from January 1, 2025. TCS is 1% on these goods.

13. Revised TDS rule on sale of property:

Under the new rule, the buyer will deduct TDS of 1% on the sale of a property that costs about Rs 50 lakh. This is applicable to all types of properties such as land, commercial or residential.

14. TDS On RBI Floating Rate Bonds:

With effect from October 1, 2024, a TDS of 10% is now deducted on RBI-led central and state government bonds including floating rate bonds. Recently, RBI kept the interest rate unchanged at 8.05% for its Floating Rate Savings Bonds, 2020 (Taxable)- FRSB 2020 (T) which will be applicable for a period of January 01, 2025, to June 30, 2025, and payable on July 1, 2025. TDS is cut on interest gained on these bonds.

15. Vivad Se Vishwas Scheme 2.0:

The government has extended the deadline for determining the payment amount under the Vivad Se Vishwas Scheme till January 1, 2025, at lower tax rates. From February 1, 2025, individuals under the scheme will have to pay additional fees depending upon the updated tax rates.

Direct Tax Vivad se Vishwas Scheme, 2024 (DTVsV Scheme, 2024)is a scheme notified by the Government of India on 20th September 2024 to resolve pending appeals in case of income tax disputes. The DTVsV Scheme, 2024 was enacted vide Finance (No. 2) Act, 2024. The said scheme came into effect from October 1, 2024.

Currently, 100% of disputed tax on appeals filed after January 31, 2020, to before July 22, 2024, which will be allowed to be paid before January 31, 2025. The disputed tax is 110% on appeals made under the scheme before January 31, 2020. The rates will rise to 110% and 120% after January 31, 2025.