It’s ITR filing season again, and there’s some important news you need to know, especially regarding the tax rebate and deadlines for the Financial Year 2024-25 (Assessment Year 2025-26).
Deadline Extended for FY2024-25!
Good news! The income tax department has extended the ITR filing deadline for FY2024-25 from July 31, 2025, to September 15, 2025. This extension is mainly due to anticipated changes in the utility forms. So, you have a bit more time to get your finances in order!
The Rs 12 Lakh Tax Rebate: Not Yet!
Here’s where many taxpayers are getting confused: the much-talked-about tax rebate for incomes up to Rs 12 lakh under the new tax regime will NOT apply to the current filing period (FY2024-25).
This new benefit, which would effectively make income up to Rs 12.75 lakh tax-free for salaried individuals (including the Rs 75,000 standard deduction), will only come into effect from the Financial Year 2025-26, starting April 1, 2025.
So, if you’re filing your ITR for income earned between April 1, 2024, and March 31, 2025, the existing tax rules and rebates for FY2024-25 are still in play.
Understanding the Tax Regimes for FY2024-25
Let’s break down the tax slabs and benefits for the current filing year (FY2024-25):
New Tax Regime (FY2024-25)
- Income Range (₹) | Tax Rate
- 0 – 3,00,000 | Nil
- 3,00,001 – 7,00,000 | 5%
- 7,00,001 – 10,00,000 | 10%
- 10,00,001 – 12,00,000 | 15%
- 12,00,001 – 15,00,000 | 20%
- Above 15,00,000 | 30%
- Standard Deduction: You get a standard deduction of Rs 75,000.
- Tax Rebate (Section 87A): If your total income is up to Rs 7 lakh, you pay no tax.
Old Tax Regime (FY2024-25)
- Income Range (₹) | Tax Rate
- 0 – 2,50,000 | Nil
- 2,50,001 – 5,00,000 | 5%
- 5,00,001 – 10,00,000 | 20%
- Above 10,00,000 | 30%
- This regime allows you to claim popular deductions and exemptions like:
- Section 80C: Up to Rs 1.5 lakh for investments in PPF, ELSS, life insurance premiums, tuition fees, etc.
- Section 80D: For health insurance premiums.
- HRA (House Rent Allowance): If you live in rented accommodation.
- Section 24(b): For home loan interest.
- Standard Deduction: Rs 50,000.
- Tax Rebate (Section 87A): If your total income is up to Rs 5 lakh, you pay no tax.
- This regime allows you to claim popular deductions and exemptions like:
Which Regime Should You Choose?
There’s no single answer, as it really depends on your individual financial situation and the deductions you can claim.
For FY2024-25, if you’ve made significant investments under Section 80C (like PPF, ELSS, life insurance), paid health insurance premiums (80D), have a home loan (24b), or get a substantial HRA component, the Old Tax Regime might still be more beneficial for you. Your total deductions could easily reduce your taxable income significantly.
However, if you haven’t utilized many tax-saving instruments, the New Tax Regime with its higher standard deduction and lower tax rates might be simpler and more advantageous.
The expert advice is clear: compare both regimes thoroughly before filing your ITR to ensure you choose the one that results in the lowest tax liability for you.
Got questions about which regime is right for you? It’s always a good idea to consult with a tax professional!