As the financial year comes to a close, it’s time once again to prepare for income tax filing. For the assessment year 2025–26, the Income Tax Department has made several updates, and understanding these changes can help you file correctly and save significantly. Whether you are a salaried employee, a freelancer, or a business owner, this article will guide you through the essential elements of filing an income tax return (ITR) and also explain how to maximize your savings.
Key Dates to Remember for ITR Filing 2025
Filing your taxes on time is crucial to avoid penalties and interest. Here are the important deadlines for the financial year 2024–25:
- April 1, 2025: Beginning of income tax return filing for FY 2024–25.
- July 31, 2025: Last date to file ITR for individuals and HUFs not requiring audit.
- October 31, 2025: Deadline for taxpayers requiring an audit (e.g., businesses).
- December 31, 2025: Last date to file a belated or revised return.
Filing late can attract a legal penalty of up to ₹5,000 and interest under Section 234A.
Know Your Applicable ITR Form
Choosing the correct ITR form is vital. Here’s a brief overview:
- ITR-1 (Sahaj): For salaried individuals with total income up to ₹50 lakh.
- ITR-2: For individuals and HUFs not having income from business or profession.
- ITR-3: For individuals and HUFs with income from business/profession.
- ITR-4 (Sugam): For presumptive income from business or profession (up to ₹50 lakh for professionals and ₹2 crore for businesses).
Using the wrong form can lead to rejection or delays in processing.
Understand the Old vs. New Tax Regime
Introduced in 2020, the new tax regime provides lower tax rates with fewer deductions and exemptions, while the old regime retains the deductions and exemptions but with higher tax slabs.
New Tax Regime Slabs (AY 2025–26):
| Income Slab (₹) | Tax Rate |
| 0 – 3,00,000 | Nil |
| 3,00,001 – 6,00,000 | 5% |
| 6,00,001 – 9,00,000 | 10% |
| 9,00,001 – 12,00,000 | 15% |
| 12,00,001 – 15,00,000 | 20% |
| Above 15,00,000 | 30% |
Note: The new regime is now the default. If you want to continue with the old regime, you must opt out each year while filing the return.
Major Deductions and Exemptions to Save Big (Old Regime)
Under the old regime, you could claim several deductions and exemptions to reduce taxable income:
1. Section 80C (Limit: ₹1.5 lakh)
Includes investments like:
- Public Provident Fund (PPF)
- Employee Provident Fund (EPF)
- Life insurance premiums
- ELSS mutual funds
- Tuition fees
2. Section 80D
- Up to ₹25,000 for health insurance premiums (₹50,000 for senior citizens).
3. Section 24(b)
- Dedication of up to ₹2 lakh on home loan interest.
4. House Rent Allowance (HRA)
- Exempt if staying in a rented house. Depends on salary, rent paid, and city.
5. Standard Deduction
- ₹50,000 for salaried individuals and pensioners.
6. Section 80CCD(1B)
- Additional ₹50,000 deduction for NPS contributions (over and above 80C).
New Tax Regime: Where You Can Still Save
While the new regime eliminates most exemptions and deductions, it still allows:
- Employer’s contribution to NPS under Section 80CCD (2)
- EPF contributions
- Gratuity and leave encashment exemptions
- Standard deduction of ₹50,000 (included from FY 2023–24 onward)
Before choosing a regime, compare your tax liability under both. Many online calculators help you determine which is more beneficial, based on your income and deductions.
Steps to File Your ITR Online
Filing your return is now easier than ever. Here’s how:
- Log in to the Income Tax Portal.
- Go to ‘e-File’ > ‘Income Tax Return’.
- Select the assessment year (2025–26) and the correct ITR form.
- Choose between online and offline.
- Fill in details or pre-fill using AIS/TIS (Annual and Taxpayer Information Statements).
- Verify your return using Aadhaar OTP, EVC, or digital signature.
- Submit and download the acknowledgment (ITR-V).
Common Mistakes to Avoid
- Choosing the wrong ITR form
- Failing to report all income sources (e.g., interest, freelance work)
- Not verifying the return within 30 days
- Ignoring Form 26AS and AIS for tax credit and high-value transactions
- Skipping the regime selection (defaults to new regime)
Maximize Your Refund: Tips and Strategies
- Claim all eligible deductions (don’t miss 80C, 80D, NPS).
- Report and set off capital losses (short-term or long-term).
- Include interest from savings, FDs, and claim 80TTA/80TTB if eligible.
- Utilize HRA and LTA exemptions if applicable.
- Donate wisely and claim 80G deductions (ensure proper receipts and PAN of the trust).
Freelancers and Gig Workers: What You Need to Know
Freelancers must report income under “Profits and Gains from Business or Profession.”
- Use ITR-3 (or ITR-4 under presumptive taxation).
- Deduct business expenses like laptop, internet, rent, travel, etc.
- Maintain books of accounts and preserve GST invoices if applicable.
- Consider opting for Section 44ADA if professional income is under ₹50 lakh — taxed at presumptive 50% income.
For NRIs and Senior Citizens
- NRIs must report only income earned or received in India.
- Seniors above 75 years may not have to file returns if they only have pension and interest income from the same bank, which deducts TDS.
Don’t Forget to Verify Your Return
Filing is incomplete until verification. You can verify via:
- Aadhaar OTP
- Net banking
- Demat account
- Bank ATM
- Physically sending the signed ITR-V to CPC Bengaluru
Conclusion
Filing your income tax return is not just a legal obligation; rather, it’s a smart financial practice that helps you in various financial aspects. With the 2025 updates, it’s crucial to understand the regime that suits your profile, claim all eligible deductions, and avoid common errors.
Compare the new and old tax regimes and do your calculations before selecting one. Whether you’re a salaried employee or a self-employed professional, timely and accurate income tax filing can lead to significant savings and financial peace of mind.
If you’re not sure, it is advisable to consult with a qualified and professional tax advisor to maximize your return and gain a better understanding of the tax provisions and manner. This will allow you to make wise decisions for your financial growth as well.
