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Time of India
2 days ago
- Business
- Time of India
ITR filing FY 2024-25: Taxpayers take note! These 7 changes in new ITR forms excel utilities are important
The income tax department has introduced new validation rules in the Excel-based ITR-1 and ITR-4 forms for FY 2024–25 (AY 2025–26), requiring more detailed disclosures at the time of filing — particularly from salaried taxpayers claiming deductions under the old tax regime. According to an ET report, experts say this shift to pre-validation aims to curb false claims and ensure quicker, more transparent return processing. Here are 7 key changes in excel utilities forms: 1. HRA claim now needs full salary and rent details Taxpayers claiming House Rent Allowance (HRA) exemption must now disclose their place of work, actual rent paid, actual HRA received, and salary break-up (basic salary and dearness allowance). They also need to indicate whether they live in a metro or non-metro city, as the exemption is based on 50% or 40% of the basic salary depending on location. These details are now mandatory in the ITR-1 form. 2. Section 80C deduction requires policy number or ID To claim deductions under Section 80C — which allows up to Rs 1.5 lakh on investments like PPF, tax-saving FDs, and life insurance — taxpayers must now provide the policy number or a valid document identification number. This move replaces earlier practice where only the deduction amount was reported, bringing more traceability and verification into the system. 3. Section 80D needs insurer's name and policy number For deductions on medical or health insurance premiums under Section 80D, taxpayers are now required to enter the name of the insurance company and the policy or document number in the return. This prevents unsupported claims and aligns deduction filings with insurance records. 4. Section 80E asks for full education loan details To claim interest deduction on education loans under Section 80E, taxpayers must provide detailed loan information. This includes the lender's name, bank name, account number, date of sanction, total sanctioned amount, outstanding amount as on 31 March, and the interest paid. These fields are mandatory, and omission may prevent return submission. 5. Section 80EE / 80EEA home loan claims need lender info Deductions claimed for interest on home loans under Sections 80EE or 80EEA must now be supported with lender details, account numbers, sanction dates, loan amount, and outstanding balance. This ensures that housing-related deductions are verified against actual bank data and limits the scope for overlapping claims, such as HRA and home loan in the same city. 6. Section 80EEB for loans needs sanction details Taxpayers claiming interest on loans for electric vehicles under Section 80EEB must disclose lender name, bank name, account number, loan sanction date, total loan amount, and remaining balance as on 31 March. The requirement mirrors the home and education loan fields and standardises loan-related disclosures across deduction categories. 7. Section 80DDB needs disease name for medical claims For deductions under Section 80DDB — meant for treatment of specified diseases — the name of the disease being treated is now a compulsory field in the ITR form. This change is aimed at ensuring that medical deduction claims are specific and aligned with medical certification norms. Chartered Accountant Abhishek Soni, co-founder of Tax2Win, said the changes mark a move from post-filing scrutiny to real-time validation. 'Previously, only deduction amounts were filled in. Now the ITR utility captures data upfront, which brings transparency,' he said. Gopal Bohra, Direct Tax Partner at N. A. Shah Associates LLP, explained that 276 validation rules are now active for ITR-1 and 347 for ITR-4. 'If a required field is missing — such as a policy number or loan sanction date — the return won't upload. The system will flag an error and halt the process,' he said. Ashish Niraj, Partner at A S N & Company, added that these fields are being introduced to stop deduction misuse. 'Some taxpayers claimed HRA and home loan deductions for the same city. Now, fields like 'place of work' and lender details make cross-verification easier,' he said. 'Only those with full, accurate documentation will be able to complete the filing.' Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
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
26-05-2025
- Business
- Business Standard
Retired and saving? CBDT's new guide helps you maximise tax benefits
For many Indians, retirement marks the beginning of a quieter life, but it doesn't mean stepping away from financial responsibilities. Fortunately, the Income Tax Department has rolled out a series of benefits that make post-retirement tax planning easier and more rewarding. From higher exemption limits to tax-free retirement payouts, here's a breakdown of the key tax reliefs available exclusively to retired employees, according to the latest official document released by the Central Board of Direct Taxes (CBDT). Higher exemption limits for senior and super senior citizens Senior citizens (aged 60–80) get a higher basic exemption limit of Rs 3 lakh, compared to Rs 2.5 lakh for others. For those above 80, or 'super senior citizens', the tax-free slab goes up to Rs 5 lakh. These enhanced limits significantly reduce taxable income in the golden years. Pension and retirement payouts: What's tax-free? Several common retirement payouts are exempt from income tax, such as: · Gratuity: Fully or partially exempt under Section 10 (10), depending on the nature of employment. · Commuted pension: Tax-free under specified conditions as per Section 10 (10A). · Leave encashment: Exempt up to specified limits under Section 10 (10AA). · Provident fund & superannuation: Amounts received from recognised funds are also exempt under Sections 10 (11), 10 (12), and 10 (13). Standard deduction and no advance tax hassle Retired employees receiving pension can avail a standard deduction of Rs 50,000. Moreover, senior citizens with no business income are exempt from paying advance tax, easing compliance. Medical and interest income deductions Healthcare expenses tend to rise post-retirement, and the tax law acknowledges that: · Rs 50,000 deduction under Section 80D for health insurance premium or medical expenses. · Rs 1 lakh deduction under Section 80DDB for treatment of specified diseases. · Up to Rs 50,000 deduction under Section 80TTB for interest income from banks, post office, or cooperative banks. No TDS is deducted if interest income is below Rs 50,000 in a year. Special provisions and filing relaxations · Under the Reverse Mortgage Scheme, the amount received is not treated as capital gains. · Very senior citizens (80+) can file returns manually if their income exceeds Rs 5 lakh or refund is due. · From AY 2022–23, citizens aged 75+ with only pension and interest income (from the same bank) are exempt from filing ITR, banks will compute and deduct the applicable tax.
India Today
13-05-2025
- Business
- India Today
Old vs new tax regime: Should your home loan decide for you?
Budget 2025 brought big changes for salaried taxpayers. With the basic exemption limit raised to Rs 12 lakh under the new tax regime, many people may now pay little or no tax, even without using any deductions. This makes the new regime attractive and much simpler to there's a catch. The new tax regime doesn't allow popular deductions like HRA, LTA, Section 80C (for investments like PPF and ELSS), or Section 80D for health insurance. One major loss is the home loan interest HOME LOAN MATTERS IN OLD REGIMEAfter the 2025 Union Budget, Indian taxpayers are at a crossroads, whether to opt for the old or new tax regime. According to CA (Dr) Suresh Surana, 'When choosing between the old and new income tax regimes, the impact of a home loan may often be a crucial factor, particularly for individuals with significant housing finance obligations.'He explained, 'Under the old regime, taxpayers are entitled to key deductions related to home loans on interest paid under Section 24(b) for a self-occupied property (restricted to Rs 2 lakhs in the case of self-occupied property, whereas no such restriction applies in the case of let out/ deemed to be let out property), and up to Rs 1.5 lakh on principal repayment under Section 80C, subject to the overall threshold limit.''Additionally, first-time homebuyers may be eligible for further deductions under Sections 80EE or 80EEA for previously availed home loans, depending on the value of the property and the amount of the loan,' mentioned THE NEW REGIME OFFERS (AND MISSES)advertisementContrastingly, the new regime brings simpler and lower tax rates. However, it takes away several key deductions, including home loan if you're still repaying a loan, especially in the initial years, you may find the old regime more tax-efficient. 'Those who have repaid their loans or do not claim housing loan benefits may benefit from the simplified and concessional rate structure of the new regime,' stated HIKE UNDER SECTION 87A: A GAME CHANGEROne major update under Budget 2025 is the increased rebate under Section 87A, from Rs 25,000 to Rs 60,000.'This has significantly improved its attractiveness to middle-income taxpayers. As a result, individuals with net total income of up to Rs 12 lakh benefit from the nil-tax liability under the new regime compared to the old tax regime, irrespective of the quantum of home loan interest. Therefore, for taxpayers with net total income of up to Rs 12 lakh, the new regime proves more beneficial, even if they are servicing a home loan,' said REGIME GAINS EDGE BEYOND RS 12 LAKH INCOMEOnce your income crosses Rs 12 lakh, things start to shift. 'It is only when such net total income exceeds Rs 12 lakh that the deductions available under the old regime, including home loan interest, start to play a decisive role in reducing overall tax liability,' mentioned added, 'In such cases, the ability to claim higher deductions may outweigh the lower slab rates under the new regime, making the old regime more tax-efficient for high-income individuals with significant interest outgo on housing loans.'BEYOND HOME LOANS: OTHER CONSIDERATIONSHome loan benefits are important, but they aren't the only ones to think about. Other deductions under the old regime, like Section 80D (health insurance), Section 80G (donations) and HRA (house rent allowance), also make a pointed out that, 'The home loan is an important variable in the tax planning equation, but the choice between regimes should be based on a comprehensive evaluation of all relevant factors, rather than on a single benefit alone.'As per Shefali Mundra, tax expert at ClearTax, 'Your income level matters; higher earners with many deductions may save more under the old regime. Also, if you regularly invest in options like PPF, ELSS, or NPS, the old regime could work better for you. But if your focus is on keeping things simple and having more cash in hand now, the new regime may suit you more.'advertisement"Choosing between the old and new tax regimes is a nuanced decision. While home loan benefits are a significant consideration, they should be weighed alongside income levels, investment strategies, and financial objectives. Taxpayers are encouraged to conduct a comprehensive analysis or consult financial advisors to determine the most beneficial regime for their circumstances," stated other words, choosing the right tax regime is no longer a one-size-fits-all decision. While home loan benefits can be a major deciding factor, especially for higher earners, taxpayers must look at the bigger picture. Income level, deductions, financial goals, and investment habits all matter. The best approach? Run the numbers for both regimes and let logic, not just your loan, guide your choice.
Mint
29-04-2025
- Business
- Mint
Time to delink investments from tax deduction limits and shift to efficient tax planning
A client once rushed to buy an insurance policy in March, only to realise later that it neither met her needs nor provided optimal tax benefits. Sounds familiar? From January to March every year, towards the end of the financial year, chartered accountants and tax consultants are bombarded with the same question – where should one invest to reduce tax liability? Often, the advice is to invest in tax-saving mutual funds, life insurance and health cover. People, specifically the salaried class, are always under the notion that such investments can help save taxes. However, with this mindset comes poor investment decisions and, at times, even a higher tax outgo due to haphazard last-minute planning. Historically, tax incentives have been linked to deductions such as equity-linked saving schemes, the National Pension System (NPS), housing loan payments, interest on education loans, Public Provident Fund, and insurance. These deductions were introduced to boost savings and inculcate investment habits among the working class. However, deduction limits have remained unchanged for years. The limit under Section 80C of the Income-Tax Act, 1961, for specified investments has been ₹ 1.5 lakh since 2015. The limit under Section 80D for insurance premiums has been ₹ 25,000 since 2016 (for citizens below the age of 60). The maximum deduction allowed for housing loan interest under Section 24 (b) has been ₹ 2 lakh since 2015. The deduction limits are abysmally low vis-à-vis inflation rates, purchasing power and the increasing financial responsibilities of taxpayers. Although new deductions have been introduced in the recent past such as Section 80EEA (interest on loan for buying affordable homes), Section 80EEB (interest on loan for purchasing e-vehicles), Section 80CCD(1B) (self-contribution to NPS), the absolute values of deductions remain largely unchanged. Under the new tax regime introduced for individuals and Hindu Undivided Families with effect from assessment year 2021-22 (FY21), there are no deductions available except for standard deduction of ₹ 50,000 from salary income under Section 16 (ia), which has been revised to ₹ 75,000 with effect from AY 2025-26, and an employer's contribution to NPS under Section 80CCD (2) of up to 14% of the salary. The new regime aims to simplify tax calculations without the complexity of deductions. Admittedly, the slabs in the new regime result in a lower tax liability vis-à-vis the old tax regime, but it may vary based on the quantum of a taxpayer's deductions. With Budget 2025 and the newly introduced Income Tax Bill, 2025, the tax slabs have been revised, and the rebate has been increased to ₹ 60,000 for those earning up to ₹ 12 lakh per annum. Taxpayers earning up to ₹ 12 lakh (excluding income from capital gains) effectively do not have to pay any tax. As a result, sticking with the old regime now requires significantly higher deductions to be worthwhile. The new regime, coupled with liberal tax rebates, may be here to stay, going by the government's nudges to taxpayers to shift from the old regime. This must be seen positively, given that people would not need to compulsorily invest in assets/instruments to save tax. Hitherto, poor investment decisions made at the end of the year and buying retirement products just to save taxes were common. How often have people rushed to buy mutual funds in March to save tax only to later realise that it doesn't meet their needs? The same goes for insurance products in which people invest because it counts in the Section 80C and 80D deduction limits and not because it is considered a hedge against contingencies. With the government steering taxpayers toward a simplified regime, the conventional model of tax-linked investments is gradually losing relevance. The message is clear—tax planning is no longer about chasing deductions but about optimising overall tax efficiency. This shift demands a change in mindset. Instead of relying on tax-saving instruments that may not align with their financial goals, taxpayers must assess whether sticking to the old tax regime is genuinely beneficial or if transitioning to the new regime offers greater flexibility and simplicity. The introduction of higher rebates and streamlined tax slabs is a strong indicator that the government aims to reduce tax-driven distortions in financial decision-making. Financial advisors must guide individuals and businesses in adapting to this new landscape. We must help shift the conversation from 'Where should I invest to save tax?" to 'Which tax regime aligns best with my financial situation?" The era of tax-driven investment decisions is fading, paving the way for a more structured, goal-oriented, and efficient tax-planning approach. Vinayak Bhat is a chartered accountant and tax associate at Bansi S. Mehta & Co.
