8 tax rule changes you must know before filing your ITR this year

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The income tax rules for FY 2024-25 (AY 2025–26) have witnessed several important changes. From higher deductions and new compliance levels to closer monitoring of refunds, these new changes directly affect your return. Filing without keeping them in mind can result in delayed refunds, mismatch with AIS, or even a notice from the tax office. What you need to know:

1. New tax regime is default now

Unless you make a specific choice when you file your return, you will be in the new regime by default. This regime offers lower slab rates but eliminates exemptions. To remain under the old regime and take exemptions like 80C, HRA, or LTA, you need to clearly communicate your choice by filing Form 10-IEA. Failing that, you lose those exemptions by default.

2. Standard deduction under new regime raised to ₹75,000

Relief for salaried and pensioners: the standard deduction in the new tax regime has been raised from ₹50,000 to ₹75,000 for FY 2024-25. This measure lowers the disparity between the two regimes, and the new one is therefore more attractive—especially to middle-rung taxpayers who don't have giant 80C deductions.

3. 20% TCS on foreign expenses above ₹7 lakh

Tax Collected at Source (TCS) on foreign remittances and travel bookings now attracts a levy of 20% above ₹7 lakh a year under the Liberalised Remittance Scheme (LRS). Education and medical expenses have lower rates but necessitate paperwork. In addition, TCS may not immediately show up in Form 26AS—especially for credit card purchases—so check non-maintenance of entries before filing.

4. Enhanced turnover thresholds for presumptive taxation

Freelancers and small business people enjoy more liberal presumptive taxation limits. Under Section 44AD (businesses), the threshold is now ₹3 crore. Under Section 44ADA (professionals), it is ₹75 lakh—if 95% or more of receipts are electronic. This is easier to comply with but keeps you under presumptive taxation for five years after you opt for it.

5. Align ITR with AIS and TIS

The Income Tax Department relies more and more on the Annual Information Statement (AIS) and Taxpayer Information Summary (TIS) for cross-verifying your income. These include salary and dividend to mutual fund redemption and credit card spends. Any mismatch between your return and AIS may trigger a notice or delay. Always reconcile your AIS, Form 26AS, and bank entries before filing.

6. Capital gains reporting must be asset-specific

You must now report capital gains separately for each of the assets—stocks, mutual fund, property, bonds—rather than clubbing them. Every transaction must be preceded by date of acquisition, cost, and sale value. This makes it easier for tracking by the department of exemptions (like Section 54) and full disclosure. Incomplete or erroneous reporting will slow down your refund or invite audit attention.

7. New returns come at an extra cost

You can now submit a revised return under Section 139(8A) within 24 months from the close of the assessment year. But there's a catch—filing in the second year levies an additional 50% tax on outstanding dues. And you cannot claim additional refunds through a revised return. It is for only correcting underreported or left-out income.

8. PAN-Aadhaar linking is mandatory

Your Permanent Account Number (PAN) will not be operational if it is not linked with Aadhaar. Your ITR will not be accepted, and your TDS credits and refunds will be held up. June 30, 2023, was the deadline for linking, and a fine of ₹1,000 remains. If you haven't already linked them, link them now and remain safe.

Stay alert, file smart

With revenue information being drawn from various sources—banks, mutual funds, passport offices—accuracy becomes a priority. Filing your return isn't only about reporting salary anymore. Cross-check all documents, reconcile reported income, choose the right regime, and keep informed about changes in the rules. Minor discrepancies can lead to major delays.