The process of filing returns for the financial year 2024-25 is going to start soon. The Income Tax Department has notified ITR-1, ITR-2, ITR-3 ITR-4, ITR-5 forms for the assessment year 2025-26.
These forms are for those people and organizations whose annual income is up to Rs 50 lakh. It is important for taxpayers to understand some important sections of the Income Tax Act, 1961 while filing returns.
These sections can help you in correct tax calculation, availing deductions and choosing the right tax regime. Let us tell you about it…
Filing under section 139(1)
Let us tell you that under section 139(1), it is mandatory for those people and organizations whose income is above a certain limit to file their ITR within the prescribed time limit. Under this section, information has been given about the provisions for both mandatory and voluntary return filing.
Tax Saving under Section 80C
If you opt for the old tax regime, then section 80C gives you the opportunity to save your tax by investing in several tax saving schemes. For example, you can avail a deduction of up to Rs 1.5 lakh by investing in Public Provident Fund (PPF), Employee Provident Fund (EPF), Equity Linked Savings Scheme (ELSS), tax saving FD and life insurance.
However, note that under the new tax regime, the benefit of section 80C is not available. But taxpayers opting for the new regime can avail a deduction of up to 10% on employer’s contribution to the National Pension Scheme (NPS) under section 80CCD(2).
Apart from this, there is a provision of tax deduction on contribution made to Agniveer Corpus Fund under Section 80CCH and under Section 80JJAA, eligible business entities can claim deduction on appointing new employees.
Section 24B
Taxpayers who are paying interest on home loan or home improvement loan can claim tax deduction under section 24B. The special thing is that this benefit is available under both the old and new tax regimes. In both regimes, you can avail a maximum tax exemption of up to Rs 2 lakh on home loan interest.
Section 10(13A)
Under this section, people living in rented houses can claim exemption on House Rent Allowance (HRA) if their rent is more than Rs 1 lakh per annum.
Section 80D
There is a provision for deduction on the premium of health insurance policies under section 80D. For those below 60 years of age, this limit is Rs 25,000, however, for senior citizens, this limit has been increased to Rs 50,000. Taxpayers can claim a maximum deduction of up to Rs 1 lakh by combining the premiums of their spouse, children and parents.
Section 234F
If you file ITR after the due date, there is a provision of penalty under section 234F. On filing the return late, a penalty of Rs 1,000 is applicable on those with income less than Rs 5 lakh and for those with income more than Rs 5 lakh, the penalty amount increases to Rs 5,000. Not only this, if you file ITR late, you may also have to pay interest charges under section 234A and 234B.
So if you are going to file ITR, keep in mind the above mentioned important sections. These sections will not only help you save maximum tax but will also make tax planning easier for you.
