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Economic Times
17 hours ago
- Business
- Economic Times
ITR filing for AY 2025-26: 7 prominent changes in ITR excel utilities for FY 2024-25, which taxpayers including salaried should know
Tired of too many ads? Remove Ads What are the changes in ITR validation rules for FY 2024-25 (AY 2025-26)? Place of Work Actual HRA Received Actual Rent Paid Basic Salary and Dearness Allowance 50% or 40% of Basic Salary, depending on whether the city is metro or non-metro. Enhanced Disclosure for House Rent Allowance (HRA): Tired of too many ads? Remove Ads Section 80C Deduction Popular in Wealth 1. ITR filing for AY 2025-26: 7 prominent changes in ITR excel utilities for FY 2024-25, which taxpayers including salaried should know Name of the Lender Bank Name Loan Account Number Date of Loan Sanction Total Loan Amount Loan Outstanding as on 31st March Interest of the loan Name of the Lender Bank Name Loan Account Number Date of Loan Sanction Total Loan Amount Loan Outstanding as on 31st March Tired of too many ads? Remove Ads The income tax department has made several changes in the income tax return ( ITR ) validation rules for reporting income earned during FY 2024-25 (AY 2025-26). As on date only the excel based ITR filing utilities for ITR-1 and 4 have been released. A brief look at these forms suggests that most of these changes are relevant for salaried persons, or those taxpayers who have any electric car loan, home loan, house rent, etc i.e. those who need to file of these changes are in the nature of enhanced declarations. Experts say this has been done to stop the instances of false claims of income tax deductions at the time of ITR filing. Earlier, the tax department used to check the tax deduction's authenticity manually at the time of processing the ITR. Now this process is automated and brought at the ITR filing level, which means less chances of errors in ITR and possible faster processing of of the changes in validation rules relate to tax deductions that can be claimed under the old tax regime. Here are seven changes introduced in the ITR filing utility for FY 2024-25 (AY 2025-26): claiming HRA exemption must now provide comprehensive details, including:Source: ITR-1 excel utilityTaxpayers now have to disclose the policy number or document identification number to claim Section 80C tax deduction. Do note under Section 80C eligible taxpayers can claim up to Rs 1.5 lakh as tax deduction for investing in various instruments like PPF, tax savings FD, life insurance policies, ITR-1 excel utilityHealth Insurance Details Taxpayers claiming deductions under Section 80D for medical/health insurance must now provide:•Name of the Insurance Company•Policy or Document NumberEducation Loan Interest For deductions on interest paid on education loans under Section 80E, the following details are now mandatory:Interest on Home Loan Similar disclosures are required for interest deductions under Section 80EE or 80EEA for residential house property:Electric Vehicle Loan Interest For interest paid on loans taken for the purchase of electric vehicles under Section 80EEB, taxpayers must provide:•Name of the Lender•Bank Name•Loan Account Number•Date of Loan Sanction•Total Loan Amount•Loan Outstanding as on 31st MarchTreatment of Specified Diseases Taxpayers claiming deductions under Section 80DDB for medical treatment of specified diseases are now required to mention the:•Name of the Specified DiseaseChartered Accountant Abhishek Soni, co-founder, Tax2Win, says: 'The above mentioned new requirements are introduced in the ITR-1 and ITR-4 forms for Assessment Year 2025–26, and they were not part of the old forms in this level of detail.'Soni explains using an example: 'For example, for HRA exemption, previously only the exemption amount was entered manually and for claiming the deductions, only deduction amount was entered. In technical terms, in earlier ITR forms, only aggregate deduction amounts were entered, and supporting documentation was needed only upon scrutiny. Now, the ITR utility is capturing this information upfront, indicating a shift toward pre-validation and increased compliance transparency.'Chartered Accountant Gopal Bohra, Direct Tax Partner, N. A. Shah Associates LLP, says: "In order to bring more control or vigil over wrong claim of various deductions under the old tax regime, the Income Tax Department has introduced several new validation rules in the e-Filing portal, so that the data which is being uploaded are accurate and compliant to the validation rules. In case, data quality defect is of category A nature, return will not be allowed to be uploaded, and an error message will be displayed."Bohra adds: "In category A defect, 276 validation rules for ITR -1 and 347 for ITR 4 are deployed and if any of the validation rules fails, return will not be allowed to be uploaded. Just to explain some of the category A validation rules, taxpayer who is claiming deduction for health insurance premium is required to disclose the name of the insurance company and policy number for claiming deduction under section 80D. Similarly, in relation to interest on education loan, housing loan, purchase of electric vehicle for claiming deduction under section 80E, 24(b)/80EE/80EEA, 80EEB respectively, details of bank from which loan is taken and date of sanction to be provided. If any of these fields are missing in the ITR, taxpayer may not be able to upload the ITR. Further, if the data quality as provided by the taxpayer is accurate, the tax return will be processed quickly."Experts say the tax deduction system was abused, which is why the tax department may have introduced these changes. Chartered Accountant Ashish Niraj, Partner, A S N & Company, says: " In recent past income tax department has detected many cases where Income Tax Refund was obtained on the basis of false claims or forged documents, hence additional information are being sought now in ITR 1 for cross verification purpose at the time of assessment if required.'According to Niraj, "Some taxpayers used to claim HRA Deduction and also Home Loan Interest deduction even though both was in same city. Now 'Place of work' is required for claiming HRA. For Loan related deductions also Name of Financials Institutions/Bank, Loan Account No, Date of Sanction, Total Loan Amount, Outstanding Loan Amount , Interest etc is required to check the authenticity of the deductions. For Investment related deductions Policy/Document Number are required , for 80D Name of Insurer also required apart from policy details etc. All these information are now sought so that taxpayer can claim deduction only if he has full details available."
Time of India
21 hours ago
- Business
- Time of India
ITR filing for AY 2025-26: 7 prominent changes in ITR excel utilities for FY 2024-25, which taxpayers including salaried should know
What are the changes in ITR validation rules for FY 2024-25 (AY 2025-26)? Place of Work Actual HRA Received Actual Rent Paid Basic Salary and Dearness Allowance 50% or 40% of Basic Salary, depending on whether the city is metro or non-metro. Live Events Name of the Lender Bank Name Loan Account Number Date of Loan Sanction Total Loan Amount Loan Outstanding as on 31st March Interest of the loan Name of the Lender Bank Name Loan Account Number Date of Loan Sanction Total Loan Amount Loan Outstanding as on 31st March The income tax department has made several changes in the income tax return (ITR) validation rules for reporting income earned during FY 2024-25 (AY 2025-26). As on date only the excel based ITR filing utilities for ITR-1 and 4 have been released. A brief look at these forms suggests that most of these changes are relevant for salaried persons, or those taxpayers who have any electric car loan, home loan, house rent, etc i.e. those who need to file of these changes are in the nature of enhanced declarations. Experts say this has been done to stop the instances of false claims of income tax deductions at the time of ITR filing. Earlier, the tax department used to check the tax deduction's authenticity manually at the time of processing the ITR. Now this process is automated and brought at the ITR filing level, which means less chances of errors in ITR and possible faster processing of of the changes in validation rules relate to tax deductions that can be claimed under the old tax regime. Here are seven changes introduced in the ITR filing utility for FY 2024-25 (AY 2025-26): claiming HRA exemption must now provide comprehensive details, including:Source: ITR-1 excel utilityTaxpayers now have to disclose the policy number or document identification number to claim Section 80C tax deduction. Do note under Section 80C eligible taxpayers can claim up to Rs 1.5 lakh as tax deduction for investing in various instruments like PPF, tax savings FD, life insurance policies, ITR-1 excel utilityHealth Insurance Details Taxpayers claiming deductions under Section 80D for medical/health insurance must now provide:•Name of the Insurance Company•Policy or Document NumberSource: ITR-1 excel utilityEducation Loan Interest For deductions on interest paid on education loans under Section 80E, the following details are now mandatory:Interest on Home Loan Similar disclosures are required for interest deductions under Section 80EE or 80EEA for residential house property:Electric Vehicle Loan Interest For interest paid on loans taken for the purchase of electric vehicles under Section 80EEB, taxpayers must provide:•Name of the Lender•Bank Name•Loan Account Number•Date of Loan Sanction•Total Loan Amount•Loan Outstanding as on 31st March7. Section 80DDB: Treatment of Specified Diseases Taxpayers claiming deductions under Section 80DDB for medical treatment of specified diseases are now required to mention the:•Name of the Specified DiseaseChartered Accountant Abhishek Soni, co-founder, Tax2Win, says: 'The above mentioned new requirements are introduced in the ITR-1 and ITR-4 forms for Assessment Year 2025–26, and they were not part of the old forms in this level of detail.'Soni explains using an example: 'For example, for HRA exemption, previously only the exemption amount was entered manually and for claiming the deductions, only deduction amount was entered. In technical terms, in earlier ITR forms, only aggregate deduction amounts were entered, and supporting documentation was needed only upon scrutiny. Now, the ITR utility is capturing this information upfront, indicating a shift toward pre-validation and increased compliance transparency.'Experts say the tax deduction system was abused, which is why the tax department may have introduced these changes. Chartered Accountant Ashish Niraj, Partner, A S N & Company, says: " In recent past income tax department has detected many cases where Income Tax Refund was obtained on the basis of false claims or forged documents, hence additional information are being sought now in ITR 1 for cross verification purpose at the time of assessment if required.'
Hans India
6 days ago
- Business
- Hans India
ULIP for Youth: Why It's Gaining Popularity Among First-Time Investors
If you are stepping into the world of investing for the first time, you probably have a lot on your plate right now – saving goals, budgets, and a list of jargon that you don't understand. But here is some good news: you are not alone, and you are certainly not out of smart investment options. Among these smart options, one financial plan that has quietly gained popularity among new investors like you is the unit-linked insurance plan or the ULIP. You can think of ULIP as a two-in-one deal – insurance coverage and market-linked returns under one scheme. The plan is flexible, tax-efficient, and completely customisable. And with access to handy online tools like the ULIP calculator, you do not need to be a finance guru to figure it out. This article will be a guide to understanding why more and more new investors are leaning into unit-linked insurance plans – and why it might be the ideal plan for you as well. Why Young Investors are Falling for ULIPs? Let's be honest, starting to invest can feel like you are expected to suddenly understand things that sound suspiciously like spells. ULIP, or unit-linked insurance plan, may have sounded like just another acronym thrown around by finance gurus, but once you get what it does, you'll see why so many young investors like you are jumping in early. So, what's the big deal? Why are ULIPs catching the eye of a generation that prefers everything instant, digital, and customisable? 1. The Best of Both Worlds If you are torn between buying life insurance to cover your dependents and trying to invest in a mutual fund to grow your wealth, ULIP might be the sweet spot for you. A section of your insurance premium goes toward life coverage, and the rest amount gets invested in market instruments – equity, debt, and other hybrid options. 2. Tax Benefits With ULIPs, the amount that you pay as a premium qualifies for tax deductions under Section 80C up to a limit of Rs. 1.5 lakhs, and the maturity benefit can also be tax-exempt based on some scenarios as per Section 10(10D). If your annual premium is above 2.5 lakhs, the gains on the premium amount will be charged as per capital gains. However, if your annual premium amount is less than the limit mentioned, the total maturity amount will be tax-exempt. 3. Total Control Over Risk Appetite You can choose the fund's investment aspect as per your risk appetite. Prefer slow and steady? Go with debt instruments. Can you afford a little risk? Consider more equity investments. Can't decide? Mix them both and go for a hybrid approach. You can even switch between funds if your financial goals or risk tolerance change over time. 4. Low Entry Barriers, High Growth Potential 'ULIPs are only for rich people' – this is a common misconception. Most entry-level unit-linked insurance plans are completely wallet-friendly. You can start with premiums as low as Rs. 1000 per month. Most plans come with a lock-in period, so these policies are long-term by design. Your small contribution can grow into something special in 7 to 10 years, given that you are consistent with the premium payment. 5. Transparency and Digital Convenience The new generation loves to track their progress in every field – be it fitness, food, or even sleep. ULIPs further complement this by offering digital convenience regarding financial progress tracking. You can monitor your fund performance, switch options, and calculate maturity amount projections with just a few clicks. Everything is transparent, and you have full control over everything. 6. Built-in Financial Discipline Another commotion misconception among new investors is that the lock-in period is a bad thing. In most cases, the lock-in period is set to 5 years. And trust us, your future self will thank you for not withdrawing early. It keeps you from panic-selling every time the market dips or when someone tells you to buy gold and invest in fixed-income instruments instead. Conclusion Getting started with investing can feel much like navigating a jungle of jargon. In such situations, ULIP might just be that shortcut that you require to get to your financial goals in a straight line. The plan helps you cover your base points – wealth creation, setting up a financial safety net, and tax savings – without drowning in them completely. All you need to do is to stay in control, switch your funds to separate plans whenever needed, and watch your money grow with the magic of compounding. Now, if you are a newbie, you can use tools like an online ULIP calculator to align your financial goals with your policy choices and make smart choices. So, don't wait for a 'perfect time' to start. The sooner you start, the more your money has time to grow. Trust us, your future self will thank you for this.
Time of India
27-05-2025
- Business
- Time of India
Income tax changes: New Income Tax Bill & New Income Tax Regime
New Income Tax Regime Income tax changes: Finance Minister Nirmala Sitharaman introduced several sweeping changes under the new income tax regime during her Budget 2025 speech earlier this year. The new income tax regime, which is also the default income tax regime, has new tax slabs effective FY 2025-26. Additionally, the basic tax exemption limit and the income level up to which taxpayers are required to pay zero or nil tax has also undergone a change. The most important is that individuals having a taxable income up to Rs 12 lakh will have to pay ZERO tax. The new income tax regime was introduced by the Narendra Modi government a few years ago as an alternate regime for taxpayers to file their tax returns under. The aim of the new income tax regime was to make the income tax return filing process easier without too much paperwork and documentation. However, unlike the old income tax regime, the new tax regime does not offer the most popular tax exemptions and deductions like Section 80C, Section 80D, LTA, HRA etc. One major deduction that is available under the new income tax regime is standard deduction. In fact, the standard deduction available under the new tax regime is higher at Rs 75,000 compared to Rs 50,000 under the old income tax regime. Additionally, the government proposes to get the New Income Tax Bill passed this year, which is a simplified and up-to-date version of the Income Tax Act 1961. The New Income Tax Bill will have key changes for taxpayers as well. As changes in the income tax return filing, income tax calculation come about, it is important for taxpayers to keep a tab on FAQs and important documents released by the government to aid the common man. You can track all the important documents related to the new income tax regime and the New Income Tax Bill here: Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
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Business Standard
22-05-2025
- Business
- Business Standard
SCSS vs NSC vs Debt Funds: Which fixed-income option is the best in 2025?
When it comes to generating stable, tax-efficient returns, investors in India often find themselves torn between traditional savings instruments like the Senior Citizens' Savings Scheme (SCSS) and the National Savings Certificate (NSC), or newer, more market-linked options like debt mutual funds. With interest rates, tax rules, and inflation all evolving, how do these options compare today? More importantly, which one should you pick based on your needs? The Contenders: What are they? Fixed-rate small saving schemes vs debt mutual funds. Source: Value Research 1. SCSS (Senior Citizens' Savings Scheme) For: Individuals aged 60 and above Interest Rate (April–June 2025): 8.2% p.a. (paid quarterly) Tenure: 5 years (extendable by 3 years) Tax Benefits: Eligible for Section 80C deduction (up to Rs 1.5 lakh) Interest is taxable, but TDS is applicable if interest exceeds Rs 50,000/year Best for: Retirees seeking regular income with government guarantee 2. NSC (National Savings Certificate) For: Any Indian citizen Interest Rate (April–June 2025): 7.7% p.a. (compounded annually, paid at maturity) Tenure: 5 years Tax Benefits: Principal qualifies for Section 80C Interest is taxable, but reinvested interest (except final year) also qualifies for Section 80C Best for: Conservative investors with a 5-year horizon, who don't need regular income 3. Debt Mutual Funds For: Investors of all ages Returns: 6–8% on average, can be higher/lower depending on type Taxation (Post-2023 rules): Gains taxed at slab rate (no LTCG benefit) No Section 80C benefit Indexation benefit abolished for debt funds Best for: Investors seeking liquidity and diversification, with some risk tolerance Comparative Snapshot Which one should you choose? For Senior Citizens: Value Research recommends SCSS Why: It offers high assured returns and quarterly payouts, ideal for retirees needing regular income. Example: Mrs. Rani, 65, invests Rs 15 lakh in SCSS. She earns Rs 30,750 every quarter, providing her with predictable income while her capital remains safe. For Salaried Taxpayers Saving for 5 Years: Choose: NSC Why: If you want a fixed return and tax savings under 80C but don't need liquidity, NSC fits the bill. Example: Sanjay, 35, wants a tax-saving investment but already maxes out EPF and PPF. He invests ₹1.5 lakh in NSC. In 5 years, he gets back ₹2.2 lakh, earning steady compounded returns without taking any market risk. For Working Professionals with Moderate Risk Appetite: Choose: Debt Mutual Funds Why: If you value liquidity and want to diversify with dynamic returns, debt funds (like low duration, short-term, or corporate bond funds) are suitable. Example: Priya, 40, keeps ₹5 lakh in a corporate bond fund yielding 7.2%. She holds it for 2 years and exits without penalty when she needs the money for her child's school admission. Caution: Tax rules have changed Post-April 2023, debt funds lost their long-term capital gains (LTCG) tax benefit and indexation advantage. Now, all gains — even after 3 years — are taxed as per slab rate. This reduces their edge over traditional instruments, especially for those in the highest tax bracket (30%). Tip: Tax-aware investors in higher brackets should lean toward SCSS or NSC unless they need liquidity. There's no one-size-fits-all answer. Your life stage, income needs, tax bracket, and risk appetite should drive the decision. As per Value Research:
