To simplify the income tax return, the Finance Ministry has provided 5 forms for filing tax returns, which are used according to the income. All the new rules that we are telling you about are related to these forms.
If you are thinking of filing income tax return for the financial year 2024-25 (AY 2025-26), then you must know about the changes in the rules for ITR forms ITR1, ITR2, ITR3 and ITR 4. Also, when you file the return and go to the income tax portal, you will have to wait for the release of e-utilities for filing ITR. At the same time, today we are giving you information about the changes made for ITR form which will help you in filing returns for the financial year 2024-25 (AY 2025-26).
To simplify the income tax return, the Finance Ministry has provided 5 forms for filing tax returns, which are used according to the income. All the new rules that we are telling you about are related to these forms.
ITR 1 and ITR 4 tax eligibility increased
The new rules are related to equity and equity mutual funds, in which if the tax payer earns a profit of Rs 1.25 lakh in long term investment, then he will have to use ITR 1 and ITR 4 forms to file income tax return. Let us tell you that earlier ITR 2 and ITR 3 were used for this and the tax benefit was only Rs 1 lakh instead of Rs 1.25 lakh.
Aadhaar enrollment ID will not be valid
Till now, Aadhaar Enrolment ID was used along with PAN card for filing income tax returns in case of not having Aadhaar card, but now it has been made mandatory to have Aadhaar number for filing tax returns. For this, the column of Aadhaar Enrolment ID has been removed in ITR 1, ITR 2, ITR 3 and ITR 5.
New tax regime for small business
The government had introduced the new tax regime in the budget last year to benefit small businesses. Also, changes cannot be made between the old and new tax regimes repeatedly. According to the Income Tax rules, taxpayers with business income have the option to switch from the old tax regime to the new tax regime once in a lifetime. However, a form has to be submitted to the tax department for this switching.
Last year ITR-4 simply asked whether the taxpayer has opted out of the new tax regime. If yes, the taxpayer has to provide the date and acknowledgement number of Form 10-IEA, if applicable. However, for FY 2024-25 (AY 2025-26), ITR-4 has a more detailed disclosure. It now seeks confirmation of the previous filing of Form 10-IEA and asks whether the taxpayer wishes to continue to opt out of the new tax regime in the current year.”
Sections 206AB and 206CCA removed
To make compliance easier, sections 206 AB and 206CCA have been completely removed. Due to which tax deductors and tax collectors will face fewer problems.
Increase in exemption under section 87A
The Finance Minister has increased the exemption under section 87A from Rs 25,000 to Rs 60,000 in the budget presented in February. This exemption ensures that no income tax will have to be paid on annual income up to Rs 12 lakh.
Changes in TDS rules
The TDS limit (TDS Limit Change) has been increased in many sections from April 1, 2025, which will provide great relief to small taxpayers. The TDS limit on interest income for senior citizens will increase to Rs 1 lakh.
