ITR Filing 2025: Rules and Deductions You Must be Aware of

The Income Tax Return (ITR) filing date was recently extended to September 15, so that taxpayers can make correct decisions while choosing the old or new tax regime.

The new tax regime is the default; if taxpayers do not choose between the old and new tax regimes, their taxes will automatically be calculated under the new tax regime. But the Income Tax rules allow taxpayers to opt out of the new tax regime, which is default and choose the old regime before the last date for filing their ITR for the respective assessment year.

Salaried employees or pensioners without business income are eligible to change their tax regime at any time prior to filing their ITR once a year by selecting the right option on the ITR-1 or ITR-2 form.

If Taxpayers are confused about which regime to choose, they should be aware that the following are only available under the old tax regime:

• House Rent Allowance (HRA)
• Leave Travel Allowance (LTA) andSEO
• Deductions under Sections 80C to 80U and
• Home loan interest under Section 24(b)

Old Tax Regime vs. New Tax Regime

Taxpayers should consider their income and pay structure before selecting any regime. the Old Regime allows exemptions and deductions like HRA, standard deduction, Section 80C, and 80D, suitable for those with high investments.

The new regime has lesser deductions, but individuals with taxable income up to Rs 12 lakh get a full tax rebate under the new regime. However, the new regime only has limited benefits under Sections 80CCD(2) and 80CCH(2), excluding the broader 80C.

The old regime will be more beneficial if taxpayers can claim deductions under Sections 80C, 80D, HRA, or house loan interest. and Salaried employees with fewer deductions may benefit from the new regime.

Also, if taxpayers have suffered any losses from house property, capital gains, or business income, they cannot be shifted to the new regime.