The Income Tax Department (ITD) has notified the new tax forms for this fiscal year 2024-25 including ITR-1, ITR-2, ITR-3, ITR-4 and ITR-5. Within a few days, the excel utility will also be shared by the department. Thereafter, taxpayers can start filing their income tax returns with ease with preloaded functionalities on e-filing portal.
Meanwhile, an important consideration which holds significance is the choice between the old and the new tax regimes. If you are also thinking between the two regimes, these are a few factors which you should consider.
Tax regime to choose: Six factors to consider
I. Lower tax slab: The new tax regime (NTR) entitles you to claim lower tax slabs whereas you are unable to claim income tax deduction.
II. Deductions: In the old tax regime, you are able to claim all the deductions under sections 80C, 80D, 80DD and 80U but the income is taxable at a relatively higher tax rate.
III. HRA exemption: Old Tax regime allows taxpayers to claim HRA exemption. It is exempted under section 10(13A) for the salaried individuals. This is not given in the new tax regime.
IV. Interest on borrowed capital: In the new tax regime, Interest on borrowed capital for Self-occupied property is not allowed as a deduction from Income from House property. When the taxpayer wants to claim deduction of interest on borrowed capital for a self occupied house, the taxpayer is supposed to choose the Old Tax Regime.
V. Rebate under 87A: Under the old tax regime, taxpayers are allowed to claim income tax rebate under section 87A for income upto ₹5 lakh whereas in the new tax regime, it has been raised to ₹7 lakh (for FY 2023-24). In Budget 2025, this limit was raised to ₹12 lakh.
VI. Standard deduction: Old tax regime allows standard deduction of ₹50,000 whereas in the new tax regime, this was raised to ₹75,000 in 2024.
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