Important Amendments to ITR Filing Rules for the Financial Year 2025–26
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New Tax Regime Becomes the Default
- The new tax regime under Section 115BAC is now the default for individuals, Hindu Undivided Families (HUFs), Associations of Persons (AOPs), Bodies of Individuals (BOIs), and Artificial Juridical Persons.
- Taxpayers can opt for the old regime by indicating their preference when filing their ITR.
Revised Income Tax Slabs Under New Regime
Under the new tax regime, income is taxed progressively across defined income brackets:
- No tax is levied on annual income up to ₹4,00,000
- Income from ₹4,00,001 to ₹8,00,000 is taxed at 5%
- The 10% rate applies to income between ₹8,00,001 and ₹12,00,000
- Income between ₹12,00,001 and ₹16,00,000 is taxed at 15%
- A 20% tax is charged on income from ₹16,00,001 to ₹20,00,000
- For income between ₹20,00,001 and ₹24,00,000, the rate is 25%
- Any income exceeding ₹24,00,000 is taxed at 30%
Additionally, with the standard deduction now increased to ₹75,000, individuals earning up to ₹12.75 lakh annually under the new regime will not have to pay any income tax.
Enhanced Standard Deduction
- The standard deduction has been increased from ₹50,000 to ₹75,000, benefiting salaried individuals and pensioners by reducing their taxable income.
Increased Rebate Under Section 87A
- With the rebate under Section 87A raised to ₹60,000, individuals earning up to ₹12 lakh under the new tax regime are not liable to pay income tax.
Higher TDS Thresholds
The thresholds for Tax Deducted at Source (TDS) have been updated:
- The TDS exemption limit on interest income for senior citizens has been raised from ₹50,000 to ₹1 lakh.
- The TDS applicability limit on rental income has been revised upward to ₹6 lakh from the previous ₹2.4 lakh.
Simplified ITR Forms
The Income Tax Department has rolled out revised ITR forms applicable for AY 2025–26:
A new Excel utility for ITR-2 was released on March 25, 2025, enhancing the user experience.
A provision has been introduced under Section 139(8A), enabling taxpayers to file revised returns and rectify mistakes after submission.
Summary Table of Key Changes
| Change | Details |
| Default Tax Regime | New regime under Section 115BAC |
| Tax-Free Income Limit | Up to ₹12.75 lakh (with standard deduction) |
| Standard Deduction | Increased to ₹75,000 |
| Section 87A Rebate | Enhanced to ₹60,000 |
| TDS on Interest (Senior Citizens) | Threshold increased to ₹1 lakh |
| TDS on Rent | Threshold increased to ₹6 lakh |
| ITR Forms | Updated ITR-2 with revised return filing feature |
| Senior Citizens (75+) | Exempt from ITR filing under specific conditions |
| Updated Return Filing Window | Extended to 4 years |
