Latest news with #Section115BAC
News18
11-06-2025
- Business
- News18
Can I Change Tax Regime While Filing ITR? Check Comparison Of New Regime Vs Old Regime
Last Updated: Salaried individuals can switch tax regimes annually when filing ITR; business owners can switch once; the new regime offers lower rates but fewer deductions. ITR Filing 2025: As the ITR filing 2025 season is going on with a total of 12,33,162 income tax returns already filed, salaried individuals are awaiting their Form 16 from employer to file ITR this year. There is a common question among taxpayers: Can I change my tax regime while filing my ITR? Experts said the answer depends on your source of income and how you plan your taxes for the financial year. Introduced in FY 2020-21 under Section 115BAC, the new tax regime offers lower tax rates but removes most deductions and exemptions such as HRA, standard deduction, 80C, etc. The old regime, on the other hand, continues to allow taxpayers to claim various deductions and exemptions, but with comparatively higher slab rates. Here's a comparison for FY25 or AY26: New Tax Regime (Default for AY 2025-26) Old Tax Regime Can You Switch Tax Regimes While Filing ITR? Yes, salaried individuals and pensioners can choose either regime at the time of filing their income tax return (ITR) every year. 'If you didn't inform your employer during the year or now wish to change your tax regime, you can do so at the time of filing your return," said an income tax practitioner. However, for those with business or professional income, the flexibility is limited, he added. Who Can Switch Annually? Salaried individuals and pensioners: They individuals can switch between old and new tax regimes every year. Self-employed or business owners: They can opt in or out only once. After opting out of the new regime once, they cannot choose it again in future years (unless business income ceases). This is governed by Section 115BAC of the Income Tax Act, 1961. Is the Tax Regime Option Locked Once Selected? Salaried individuals: No, it's not locked. You can change your choice every assessment year. Business/profession income taxpayers: Yes, once you switch back to the old regime, you cannot opt for the new regime again unless you stop having business income. How to Change Tax Regime While Filing ITR? You can choose your preferred tax regime directly while filing your ITR online. Here's how: Steps to change tax regime on the Income Tax Portal: Note: From AY 2024-25 onwards, the new tax regime is the default. You need to opt out if you want to stick with the old regime. FAQs 1. Can I switch back to the old regime after opting for the new one? Salaried individuals: Yes, every year. Business income: You can switch only once. After opting out of the new regime, you cannot opt in again unless your business/professional income ceases. 2. What happens if I forget to choose the regime while filing ITR? If you don't make a choice: 3. Is Form 10IEA required? Yes, for AY 2024-25 onwards, Form 10IEA is mandatory for opting in or out of the new regime in some cases — especially for those with business income. top videos View all Salaried individuals usually do not need to file it unless explicitly asked based on portal prompts. So, you can change your tax regime while filing ITR, but only salaried individuals have the freedom to switch every year. Business owners or professionals can make the change only once. Be mindful of the tax-saving opportunities each regime offers and make your choice wisely based on actual calculations. About the Author Mohammad Haris Haris is Deputy News Editor (Business) at He writes on various issues related to markets, economy and companies. Having a decade of experience in financial journalism, Haris has been previously More Stay updated with all the latest business news, including market trends, stock updates, tax, IPO, banking finance, real estate, savings and investments. Get in-depth analysis, expert opinions, and real-time updates—only on News18. Also Download the News18 App to stay updated! tags : income tax income tax return Location : New Delhi, India, India First Published: June 11, 2025, 12:16 IST News business » tax Can I Change Tax Regime While Filing ITR? Check Comparison Of New Regime Vs Old Regime
News18
15-05-2025
- Business
- News18
Income Tax Department Notifies All ITR Forms: Which Form Should You Choose For AY 2025-26?
Last Updated: Though ITR filing is yet to be enabled, it is necessary to know which tax return form should you choose to file income tax return. ITR Filing Season 2025: The income tax department has now notified all seven income tax return (ITR) forms for the assessment year 2025-26. Though ITR filing is yet to be enabled, it is necessary to know which tax return form should you choose to file income tax return. Most individual taxpayers will have to file their income tax returns by July 31, 2025, while different categories of assessees, including companies and those requiring audits, have different deadlines. Who Needs to File Their ITR by July 31? The July 31 deadline is applicable to most individual taxpayers. This includes salaried employees, pensioners, freelancers, and small business owners who are not subject to audit requirements. According to the income tax department, this deadline applies to individuals, Hindu Undivided Families (HUFs), Associations of Persons (AOPs), and Bodies of Individuals (BOIs) whose accounts are not required to be audited. Taxpayers opting for the new concessional tax regime under Section 115BAC or availing various exemptions will also have to submit the relevant declarations and forms before this date. This July 31 deadline will not be applicable for corporate-assessees as well as individuals whose books of account are required to be audited. The July 31 deadline also does not apply to: Which ITR Form Should You Use? The Income Tax Department has notified seven forms—ITR-1 to ITR-7—for different categories of taxpayers. Here's who can file which form: ITR-1 (Sahaj): This is for resident individuals having a total income up to Rs 50 lakh, and income from salary, one house property, long-term capital gains up to Rs 1.25 lakh under Section 112A, other sources (like interest), and agricultural income up to Rs 5,000. ITR-4 (Sugam): This form can be used by resident individuals, HUFs, and firms (excluding LLPs) having total income up to Rs 50 lakh and income from business or profession under the presumptive taxation scheme. It is also applicable to long-term capital gains up to Rs 1.25 lakh under Section 112A. ITR-2: This is applicable to individuals and HUFs who do not have income from business or profession, but have income from capital gains, more than one house property, or foreign income/assets. ITR-3: For individuals and HUFs who have income from profits and gains of business or profession. It is also applicable to long-term capital gains up to Rs 1.25 lakh under Section 112A. ITR-5: To be filed by firms, LLPs, AOPs, BOIs, and cooperative societies. ITR-6: This is meant for companies other than those claiming exemption under Section 11 (such as charitable or religious organizations). ITR-7: To be filed by trusts, political parties, charitable institutions, and others who are required to file returns under Sections 139(4A), 139(4B), 139(4C), or 139(4D). With all forms now available, taxpayers are advised to start collecting necessary documents such as Form 16, interest certificates, capital gains statements, and investment proofs to ensure timely filing. Filing early can also help in faster processing of refunds, and avoids last-minute errors or technical glitches on the portal. When Will ITR Filing Start? ITR filing usually starts in April and forms are notified in February every year. However, this year, ITR forms have been notified during April-May, the ITR filing has not been enabled yet. Experts expect ITR deadline to extend this time due to delay in the commencement of ITR filing. 'It's been 45 days, and yet Income Tax India has not released the Income Tax Utilities for filing. Does this mean we're getting an automatic extension? Or will taxpayers and professionals once again be left to suffer due to the inefficiency of the Income Tax Department?" said a tax practitioner. Stay updated with all the latest business news, including market trends, stock updates, tax, IPO, banking finance, real estate, savings and investments. Get in-depth analysis, expert opinions, and real-time updates—only on News18. Also Download the News18 App to stay updated! First Published: May 15, 2025, 10:16 IST
Time of India
02-05-2025
- Business
- Time of India
Row over rebate on capital gains tax settled in taxpayers' favour
Ahmedabad: The rebate row over capital gains tax has taken a decisive turn. With the Centre amending Section 87A through the Finance Act, 2025, the law now clearly denies rebates on income taxed under special rates, including capital gains. Tired of too many ads? go ad free now But here's the twist — the change is forward-looking, not retrospective. That gives taxpayers a strong legal footing to claim missed rebates from previous years. The debate over the eligibility of rebate under Section 87A of the Income-Tax Act — particularly concerning tax on short-term capital gains (STCG) from equity shares under Section 111A and long-term capital gains (LTCG) from listed securities under Section 112 — has been a long-standing one. The Central Board of Direct Taxes (CBDT), in its Budget 2025 FAQs, clarified that rebates under Section 87A are only available for taxes calculated as per slab rates under the new tax regime (Section 115BAC) and not on capital gains, lotteries, or other special-rate incomes. International tax expert Mukesh Patel explained that the legislative amendment now restricts the rebate to only the tax payable under Section 115BAC(1A). "This amendment, applicable from Assessment Year 2026–27, shuts the door on future claims based on capital gains. But since it has been made prospectively, taxpayers can still claim such rebates for AYs 2024–25 and 2025–26," he said. This update could offer significant relief to many taxpayers who faced rejection of their rebate claims after the CBDT, on July 5, 2024, instructed the Centralised Processing Centre (CPC) to block such claims in the ITR utility. Tired of too many ads? go ad free now The govt had earlier enhanced the scope of rebate — increasing the income threshold from Rs 5 lakh to Rs 7 lakh and the rebate amount from Rs 12,500 to Rs 25,000 — to push taxpayers toward the new regime under Section 115BAC. However, the tax department refused to extend these benefits to capital gains incomes, which sparked protests and legal challenges. "The Bombay high court directed the reopening of the ITR utility. However, the department continued to reject claims for rebate in this regard, without heeding the view that taxpayers could not be deprived of their legitimate claim, as there was no amendment in law to support its interpretation," said Patel. Mukesh Patel said, "After above-referred amendment, introduced only with prospective effect, there is no room for controversy any longer. Taxpayers can easily defend their claims under appeal or even press for relief by way of revision or rectification in respect of concluded matters for Assessment Year 2024-25."
