ITR Filing FY 2024-25: New Tax Rules, Capital Gains Changes & What You Must Know Before Filing

ITR Filing FY 2024-25: New Tax Rules, Capital Gains Changes & What You Must Know Before Filing

With the financial year 2024–25 underway, taxpayers need to stay informed about the latest income tax rule changes before they file their returns. The Union Budget 2024 brought some significant reforms—especially under the new tax regime—impacting everything from capital gains taxation to deductions under Section 80CCD(2) and standard deductions.

Let’s decode the five major updates you must consider while filing your income while filing ITR this year.

1. Updated Tax Slabs Under New Regime

The new tax regime has now become the default option, offering reduced rates with minimal exemptions. Here’s a quick look at the revised tax slabs for FY 2024-25:

This revision has made the new regime more appealing, especially for high-income earners. However, those with substantial deductions may still find value in the old regime.

2. HRA – A Powerful Tool Under the Old Regime

If you’re claiming House Rent Allowance (HRA), the old tax regime might still work in your favour. Based on your gross salary and actual HRA received, your tax savings can be significant."

For instance:

• A person earning ₹60 lakh annually with ₹12 lakh HRA could save ₹4.77 lakh under the old regime compared to the new one.
• Without HRA, savings drop drastically, highlighting HRA as a key deciding factor.

So, if you’re unsure whether to opt for the new or old regime, calculate based on your eligible exemptions like home loan interest under Section 24(b) and HRA.

3. Major Capital Gains Tax Relief from July 23, 2024

The capital gains tax structure has seen the biggest overhaul in recent years:

• LTCG tax on all assets (including real estate and equities) is now 12.5%, up from 10% for equities and down from 20% for real estate.
• STCG tax on some assets, such as equities, has increased from 15% to 20%.
• Indexation benefits withdrawn for real estate assets bought after April 1, 2001.
• A Rs 1.25 lakh exemption limit for LTCG on equities replaces the earlier ₹1 lakh cap.

However, as per the Finance Bill amendment, sellers of assets bought before July 23, 2024, can choose to apply indexation under the old scheme or adopt the new flat-tax system, whichever offers lower tax outgo.

Also Read: TDS Refund Without ITR Filing? Here’s What the New Government Rule Means for Small Taxpayers

4. Standard Deduction Boost for New Regime Taxpayers

To make the new regime more attractive, the standard deduction has been increased from ₹50,000 to ₹75,000 for FY 2024-25. However, this enhancement is exclusive to the new regime. Those under the old regime continue to receive the ₹50,000 deduction."

This move significantly benefits middle-income earners, especially those not claiming other deductions under sections like 80C or 80CCD(2).

5. NPS Contribution Benefits Enhanced

Good news for salaried employees! From FY 2024-25, private sector employees under the new tax regime can now enjoy a 14% deduction on the employer’s contribution to NPS, up from 10% earlier. This aligns them with government employees, who already received the 14% benefit.

The provisions of Section 115BA remain unchanged for companies, but for individual taxpayers under the corporate NPS model, this extended deduction could lead to significant savings.

Bonus Insight: Foreign Income & Penalty Relaxation

If you're an Indian resident with foreign assets, including ESOPs, overseas bank accounts, or foreign social security contributions, don’t forget to disclose them while filing your ITR.

Earlier, missing these disclosures—even if the asset was of low value—could attract a penalty up to ₹10 lakh. Now, as per Budget 2024, no penalty will apply for non-disclosure of low-value assets (worth up to ₹20 lakh). Still, it’s advisable to report them to maintain transparency.

Conclusion: New Regime vs Old – What Should You Choose?

Taxpayers with limited exemptions and deductions may benefit more from the new tax regime due to reduced tax rates and a higher standard deduction. However, if you’re eligible for large deductions—especially under HRA, Section 80CCD(2), or home loan interest—the old regime could still be your best bet.

Evaluate your total income while filing ITR, compare tax liability under both regimes, and make a wise, tax-optimised decision.