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Time of India
4 days ago
- Business
- Time of India
Form 16 for ITR filing: Higher standard deduction for these taxpayers to other changes in Form 16 for FY 2024-25 (AY 2025-26)
By June 15, 2025, salaried employees should receive their Form 16 for the financial year 2024-25 from their employer. This year, Form 16 will undergo certain changes due to the changes announced in the July 2024 Budget. Your Form 16 will change in the following three ways this year: 1. Taxes deducted from other incomes: Your Form 16 will show the tax deducted from your other sources of income and also the Tax Collected at Source ( TCS ) on expenditures on specified items. This will happen if you have submitted Form 12BBA to your employer. Budget 2024 amended the income tax rules to allow salaried individuals to inform their employers of the TDS on the individual's other sources of income, as well as TCS from specified expenses of the individual. This TDS and TCS can then be adjusted against (subtracted from) the total tax deductible from the employee's salary. This would help the employee as total TDS from salary would be reduced accordingly. Suresh Surana, a practising chartered accountant, says, "This year, Form 16 will show not only tax deducted by the employer on the salary income, but will also show tax deducted on other sources of income such as interest on fixed deposits or tax paid as TCS on foreign travel expenditure, etc. However, this will happen only if a salaried employee has shared the details of other taxes deducted (TDS/TCS) via Form 12BB." Live Events Also Read: New form to reduce TDS on salary 2. Higher standard deduction from salary under new tax regime: From FY 2024-25 (AY 2025-26), the standard deduction from salary has been increased from Rs 50,000 to Rs 75,000 under the new tax regime. In Form 16, if you have opted for the new tax regime for FY 2024-25 (AY 2025-26) for TDS on salary, you will receive a higher amount of Standard Deduction from your salary when your employer deducts tax at source. Income tax laws for FY2024-25 allow a Standard Deduction of Rs 75,000 under the new tax regime. However, while filing ITR for FY 2024-25 (AY 2025-26), if an individual switches from the new tax regime to the old tax regime, then only standard deduction of Rs 50,000 will be allowed to be claimed from the salary income. Also Read: Last date to receive Form 16 by salaried employees 3. Higher NPS deduction on employer's contribution: From FY 2024-25, the new tax regime allows a higher deduction from gross taxable income to the employee on the employer's contribution to NPS. An employee can claim a deduction of up to 14% of their basic salary under Section 80CCD (2) in the new tax regime. This deduction can be claimed on the employer's contribution to the National Pension System (NPS) account of the employee. This higher deduction would reflect in your Form 16 only if you are under new tax regime for TDS from salary. Here also, if the tax regime is switched from the new to the old tax regime while filing ITR, then the deduction will be reduced. An employee will be eligible to claim a deduction of only 10% of their basic salary under Section 80CCD (2) on the employer's contribution to NPS in the old tax regime.
India.com
4 days ago
- Business
- India.com
Senior Citizens' Guide To ITR Filing 2024-25: Know All About Important Exemptions And Deductions
New Delhi: Filing income tax returns can be confusing, especially for senior citizens. While those above 80 years are not required to file returns at all, people between 60 and 80 still have to. However, there's some relief for seniors above 75—if their income is only from pension or interest, they can just submit Form 12BBA at their bank instead of going through the full return-filing process. Here's a simple look at the key deductions, exemptions, and tax-saving options available to senior citizens under the old tax regime. Higher Basic Exemption Limit for Senior Citizens Senior citizens under the old tax regime get a higher basic exemption limit. For those aged 60 and above, income up to Rs 3 lakh is tax-free while for those over 80, the limit goes up to Rs 5 lakh. Anyone with taxable income up to Rs 5 lakh can claim a rebate, making their total tax payable zero. In comparison, the new tax regime offers a flat basic exemption limit of Rs 3 lakh for everyone, regardless of age. However, it provides a rebate for incomes up to Rs 7 lakh and a higher standard deduction of Rs 75,000 for pensioners, compared to Rs 50,000 in the old regime. Section 80C deductions Senior citizens under the old tax regime can save on taxes by investing in the Senior Citizens' Saving Scheme (SCSS). This scheme is open to those above 60 years of age (or 55 for retired civilian employees and 50 for defence personnel). Investments of up to Rs 30 lakh in SCSS are eligible for a tax deduction of up to RS 1.5 lakh under Section 80C.// Tax Deductions on Health Insurance Senior citizens can claim a tax deduction of up to Rs 50,000 under Section 80D for health insurance premiums they pay. If their children pay the premium on their behalf, the children can also claim this deduction. In such cases, the total deduction can go up to Rs 75,000—Rs 50,000 for parents and Rs 25,000 for self, spouse, and children. If a senior citizen pays the premium for their own policy and also for their parents then they can claim up to Rs 1 lakh in deductions under this section. Furthermore, if a senior citizen doesn't have health insurance they can still claim a deduction of up to Rs 50,000 for medical expenses they incur during the year. Tax Break on Interest Income for Senior Citizens Senior citizens can get tax relief on interest earned from savings and fixed deposits in banks and post offices under Section 80TTB. They can claim a deduction of up to Rs 50,000 in a financial year. If the interest earned goes beyond this limit, the extra amount will be taxed.
