Income Tax Essentials for Indian Taxpayers (FY 2024-25)

Income Tax Essentials for Indian Taxpayers (FY 2024-25)

(As per the Income Tax Act, 1961 – Latest Amendments)

?? Understanding income tax is crucial for financial planning and compliance. This guide covers tax slabs, deductions, TDS, return filing, and smart tax planning strategies. ?

?? Table of Contents

1. Revised Income Tax Slabs (New Tax Regime)
2. Taxable Income Categories (Sections 15-59)
3. Key Tax Deductions & Exemptions (Chapter VI-A)
4. TDS, Advance Tax & ITR Filing (Sections 190-208)
5. How to File ITR Online (Section 139)
6. Smart Tax Planning Tips
7. Conclusion

?? Revised Income Tax Slabs (New Tax Regime)

The 2025 Union Budget introduced significant changes to the income tax slabs under the new tax regime to provide relief to taxpayers.

Key Highlights:

• No Income Tax on Income up to ?12,75,000: With the revised standard deduction of ?75,000, individuals earning up to ?12,75,000 annually are exempt from income tax.
• Revised Tax Slabs:

Note: The old tax regime remains unchanged, and taxpayers can choose between the old and new regimes based on their financial situations.

?? Taxable Income Categories (Sections 15-59)

1. Salary (Section 17): Includes basic salary, allowances (e.g., House Rent Allowance), perquisites, and bonuses.
2. House Property (Sections 22-27): Income from property, such as rental income, with deductions available for home loan interest.
3. Business & Profession (Sections 28-44): Profits or gains from business or professional services after allowable deductions.
4. Capital Gains (Sections 45-55): Profits from the sale of capital assets like property or stocks, categorized into short-term and long-term gains.
5. Other Sources (Sections 56-59): Income not covered above, such as interest from savings accounts, fixed deposits, dividends, and lottery winnings.

?? Key Tax Deductions & Exemptions (Chapter VI-A)

1?? Section 80C – Popular Tax-Saving Investments (Max: ?1.5 lakh)

• Public Provident Fund (PPF)
• Employee Provident Fund (EPF)
• Life Insurance Premiums
• Equity Linked Savings Scheme (ELSS)
• National Savings Certificate (NSC)

2?? Section 80D – Medical Insurance (Updated in 2025 Budget)

• Individuals Below 60 Years: Deduction up to ?50,000 for health insurance premiums.
• Senior Citizens (60 Years and Above): Deduction up to ?75,000 for health insurance premiums.
• Preventive Health Check-ups: Additional deduction of up to ?5,000 within the overall limits.

3?? Section 80E – Education Loan Interest

• Deduction for interest paid on loans for higher education (no upper limit).

4?? Section 80TTA – Savings Account Interest

• Deduction up to ?10,000 on interest earned from savings accounts.

5?? Section 80G – Donations to Charitable Organizations

• Deduction ranging from 50% to 100% on eligible donations.

Note: Under the new tax regime, most deductions and exemptions, including those under Sections 80C and 80D, are not available. Taxpayers should evaluate which regime is more beneficial based on their financial situations.

?? TDS, Advance Tax & ITR Filing (Sections 190-208)

1?? Tax Deducted at Source (TDS)

• TDS is deducted by the payer on specified payments like salary, rent, and interest.
• The 2025 Union Budget increased the TDS threshold for the interest income of senior citizens from ?50,000 to ?1,00,000 and Rental income from ?2,40,000 to ?6,00,000

2?? Advance Tax

• Applicable if your total tax liability exceeds ?10,000 in a financial year.
• Payable in installments as per specified due dates to avoid interest penalties.

3?? Income Tax Return (ITR) Filing

• Mandatory for individuals with income above the basic exemption limit.
• The deadline for filing ITR for individuals is typically July 31st of the assessment year.
• Penalty for Late Filing (Section 234F): ?5,000 (?1,000 if income < ?5 lakh).

?? How to File ITR Online (Section 139)

1?? . Gather Documents: Form 16, bank statements, investment proofs. 2?? Choose ITR Form – ITR-1 (Salaried), ITR-2 (Capital Gains), ITR-3 (Business). 3?? Log in & Pre-fill Data – incometax.gov.in 4?? Claim Deductions & Compute Tax 5?? Submit ITR & Verify (via Aadhaar OTP, net banking, or physical ITR-V form)

?? Smart Tax Planning Tips

? Choose the Right Tax Regime – Compare Old vs. New regime ? ? Invest in 80C Instruments – PPF, ELSS, NPS, FD ? ? Use HRA & Home Loan Benefits ? ? File ITR on Time & Avoid Penalties ?

?? Conclusion

Understanding tax laws helps in better financial planning & compliance. Utilize deductions, exemptions, & smart tax strategies to optimize tax savings.