India Tax FAQs & Expert Guidance (AY 2025-2026 (FY 2024-2025))

Under the New Tax Regime for FY 2024-25 (AY 2025-26), salaried individuals receive an enhanced Standard Deduction of ₹75,000 (under Section 16(ia)). When subtracted from a gross salary of ₹7,75,000, your net taxable income becomes exactly ₹7,00,000. Under Section 115BAC, income between ₹3,00,001 and ₹7,00,000 incurs a calculated tax of ₹20,000 (5% of ₹4,00,000). However, Section 87A provides a full tax rebate of up to ₹25,000 for any resident individual whose net taxable income does not exceed ₹7,00,000. Therefore, the ₹20,000 tax liability is reduced to zero, resulting in zero tax payable.

The Old Tax Regime is advantageous only if your total eligible exemptions and deductions exceed the breakeven threshold of approximately ₹3.75 Lakh to ₹4.25 Lakh (depending on gross income). Under the Old Regime, you can claim: Section 80C deductions up to ₹1,50,000 (EPF, PPF, ELSS, life insurance, home loan principal), Section 80D health insurance up to ₹25,000-₹50,000, Section 24(b) home loan interest deduction up to ₹2,00,000, House Rent Allowance (HRA) exemptions under Section 10(13A), and Section 80CCD(1B) NPS up to ₹50,000. If your investments and home loan interest are below this threshold, the New Tax Regime yields lower tax.

For individual taxpayers, salaried employees, and non-audit business entities, the deadline to file the annual Income Tax Return (ITR-1, ITR-2, ITR-3, or ITR-4) is July 31 following the financial year. If you miss this deadline, you can file a 'Belated Return' under Section 139(4) up until December 31. However, filing late incurs a late fee under Section 234F: ₹5,000 if total income exceeds ₹5,00,000 (or ₹1,00,000 if income is under ₹5,00,000), plus penal interest of 1% per month under Section 234A on any unpaid tax balance. Crucially, late filers forfeit the ability to carry forward business and capital losses.

Under the Finance (No. 2) Act 2024, capital gains tax rates were restructured: Short-Term Capital Gains (STCG) on listed equity shares and equity-oriented mutual funds (Section 111A) increased from 15% to 20%. Long-Term Capital Gains (LTCG) on listed equity (Section 112A) increased from 10% to 12.5%, while the annual tax-free exemption limit was raised from ₹1,00,000 to ₹1,25,000. For unlisted assets and real estate, LTCG is taxed at a flat 12.5% without indexation benefit for properties acquired on or after July 23, 2024 (with a grandfathering option allowing taxpayers selling pre-July 2024 residential property to pay either 20% with indexation or 12.5% without indexation).

If Tax Deducted at Source (TDS) under Section 192 (salary) or Section 194A (bank interest) exceeds your actual total income tax liability, you claim a refund by filing your annual ITR on the e-filing portal. Before filing, download Form 26AS and your Annual Information Statement (AIS) / Taxpayer Information Summary (TIS) from the portal to verify that all TDS entries match your Form 16. Once verified, report your total income and TDS credits. If the refund is approved, the Income Tax Department processes it under Section 143(1) and deposits the refund with interest directly into your pre-validated bank account.