Taxpayers across India are gearing up to file their Income Tax Returns (ITR) for the financial year 2024-25, that’s the assessment year 2025-26. But before you jump onto the income tax portal, pause!
You need to have a checklist of important documents ready, because missing even one can delay or derail your filing. Also, understanding which tax regime you’re filing under old or new, will determine how much tax you actually end up paying. Let’s break it down.
Documents You Must Have Before Filing ITR The Income Tax Department updates guidelines every year, so make sure the following documents are in place for FY 2024-25:
- PAN, Aadhaar & Bank Passbook: Your PAN must be linked to Aadhaar under Section 139AA, else your ITR won’t be processed.
- Form 16, Form 16A & Form 26AS: These include salary and TDS details — a must-have for salaried and non-salaried taxpayers.
- AIS & TIS: Download your Annual Information Statement and Taxpayer Information Summary from the IT portal to verify income sources.
- Investment Proofs: Keep documents related to deductions under Sections 80C, 80D, 80E, housing loans, rent, insurance, and donations.
- Capital Gains & Asset Records: Declare gains from shares, mutual funds, property sales, or buybacks.
- Foreign Income Details: If you hold overseas assets or bank accounts, keep Form 67 and other income proofs handy.
- Previous Returns & Audit Reports: Especially important for those under audit — maintain Forms 3CB-3CD and 3CEB if applicable.
- Important update: The ITR filing deadline has been extended to September 15, up from the earlier July 31 cut-off.
- Choosing a Tax Regime: Old vs New Once your documents are in order, choose your tax regime wisely.
Under the old regime, income up to ₹2.5 lakh is tax-free. Between ₹2.5–5 lakh, you pay 5%, then 20% from ₹5–10 lakh, and 30% above ₹10 lakh. You can claim deductions like:
- ₹1.5 lakh under 80C
- ₹25,000–₹50,000 under 80D
- ₹10,000 under 80TTA
Standard deduction of ₹50,000 Plus, if your total income doesn’t exceed ₹5 lakh, you get a rebate of up to ₹12,500.
In the new tax regime, the income slabs are broader and come with simplified rates. Income up to ₹3 lakh is completely tax-free. For income between ₹3 lakh and ₹7 lakh, a 5% tax rate is applied. If your income falls in the ₹7 lakh to ₹10 lakh range, you’ll be taxed at 10%.
From ₹10 lakh to ₹12 lakh, the applicable rate is 15%, while income between ₹12 lakh and ₹15 lakh is taxed at 20%. Any income above ₹15 lakh attracts a 30% tax rate. This regime offers lower rates but limits most exemptions and deductions available under the old regime.
You can’t claim most deductions, but salaried individuals get a standard deduction of ₹75,000. If your income is below ₹7 lakh, you also qualify for a rebate of ₹25,000.
In both regimes, a 4% Health and Education Cess applies on the total tax.
Example: How to Calculate Your Tax Let’s say your annual salary is ₹12.75 lakh and you choose the new tax regime. After subtracting the ₹75,000 standard deduction, your taxable income becomes ₹12 lakh.
Here's how it breaks down:
- 0–₹3 lakh: No tax
- ₹3–7 lakh @5% = ₹20,000
- ₹7–10 lakh @10% = ₹30,000
- ₹10–12 lakh @15% = ₹30,000
Total tax before cess = ₹80,000
Then add 4% cess = ₹3,200
Final tax payable = ₹83,200
Organize your financial papers, pick the right regime, and calculate your taxes smartly. A little preparation now can save you from penalties, and maybe even some money, later.
