The income tax landscape is dynamic, with changes and updates introduced regularly. For AY 2025-26 (which pertains to the financial year April 1, 2024, to March 31, 2025), several aspects warrant attention for government employees:
1. Default Tax Regime:
The new tax regime is now the default option. If you wish to continue with the old tax regime to avail various deductions and exemptions, you must explicitly opt for it while filing your return. It’s vital to assess which regime offers greater tax benefits based on your income and eligible deductions.
2. Enhanced Disclosure Requirements:
The Income Tax Department has introduced enhanced validation rules in the ITR filing utility. For instance, if you claim House Rent Allowance (HRA), you’ll need to provide comprehensive details like place of work, actual HRA received, actual rent paid, basic salary, and dearness allowance. Similarly, for deductions under Section 80C, you might need to provide policy numbers or document identification numbers. Increased scrutiny on deductions like Section 80D (medical insurance), 80E (education loan interest), and 80EE/80EEA (home loan interest) also requires more detailed information.
3. ITR Forms Availability:
As of now, ITR-1 (Sahaj), ITR -2 and ITR -3 and ITR-4 (Sugam) forms are generally available for online filing. Government employees typically file ITR-1 if their total income is up to ₹50 lakhs and comes from salary/pension, one house property, and other sources (like interest). Those with business or professional income on a presumptive basis might file ITR-4. Always ensure you select the correct ITR form based on your income sources and eligibility criteria.
4. Due Dates:
While the standard due date for individual ITR filing is typically July 31st, it’s always advisable to check the latest notifications from the Income Tax Department. For AY 2025-26, the deadline has been extended to September 15, 2025, for salaried employees and individuals whose accounts are not required to be audited. Filing on time is crucial to avoid penalties and ensure timely processing of any refunds.
5. Asset Reporting Threshold Increased:
The threshold for mandatory asset and liability disclosure has been raised from ₹50 Lakh to ₹1 Crore for taxpayers with gross total income exceeding this limit.