Income Tax Rules 2024-25: What’s New and What Taxpayers Should Know Before Filing ITR in July 2025
As the financial year 2024 comes to an end, India’s income tax system has undergone several key changes. The Union Budget 2024-25, along with updates announced in July 2024, has introduced a series of tax reforms that directly impact salaried individuals, investors, and business owners.
These new rules will apply for the current financial year (2024-25) and will affect how you file your income tax return (ITR) in July 2025.
Here’s a simple breakdown of the 10 major changes you need to know.
1. New Tax Regime Slabs Revised
The new income tax regime has been revised to provide relief to taxpayers. The updated slab rates could help save up to ₹17,500 annually.
Revised slab rates under the new regime:
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Income up to ₹3 lakh – No tax
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₹3 lakh to ₹7 lakh – 5%
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₹7 lakh to ₹10 lakh – 10%
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₹10 lakh to ₹12 lakh – 15%
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₹12 lakh to ₹15 lakh – 20%
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Above ₹15 lakh – 30%
2. Higher Standard Deduction
The standard deduction has been increased under the new regime:
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For salaried individuals: from ₹50,000 to ₹75,000
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For family pensioners: from ₹15,000 to ₹25,000
3. No Change in the Old Tax Regime
There are no changes in the old tax regime. If you choose the old system, the existing tax slab rates and deductions will continue as they are.
Old regime slab rates:
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Up to ₹2.5 lakh – No tax
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₹2.5 lakh to ₹5 lakh – 5%
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₹5 lakh to ₹10 lakh – 20%
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Above ₹10 lakh – 30%
4. Capital Gains Tax Hiked
There are two important changes in capital gains taxation:
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Short-term capital gains (on listed shares or mutual funds) will now be taxed at 20% instead of 15%
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Long-term capital gains tax increased from 10% to 12.5%, and the tax-free limit has been raised from ₹1 lakh to ₹1.25 lakh
5. Securities Transaction Tax (STT) Increased
Traders in stocks and F&O (derivatives) will now pay more STT:
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On options, STT rises from 0.0625% to 0.1%
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On futures, it increases from 0.0125% to 0.02%
6. New Tax Rule for Share Buybacks (From Oct 1, 2024)
Earlier, companies paid tax on share buybacks and investors received the amount tax-free.
Now, buyback proceeds will be taxed as income in the hands of shareholders, similar to how dividends are taxed, based on your personal slab.
7. Indexation Benefit Limited
For property sales, the government has made changes to how tax is calculated:
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Indexation is removed for most long-term capital gains.
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But individuals and HUFs can choose:
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12.5% tax without indexation, or
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20% tax with indexation
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This may increase tax liability for those selling property after holding it for many years.
8. Key TDS (Tax Deducted at Source) Changes
Several important changes in TDS rates and rules:
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TDS of 5% merged into 2% for various payments
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The 20% TDS on mutual fund redemptions is removed
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TDS on e-commerce transactions reduced from 1% to 0.1%
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TCS (Tax Collected at Source) can now be adjusted against TDS on salaries
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Delays in TDS payments will not be treated as criminal if paid by the filing deadline
9. Reopening of Income Tax Assessments
Tax assessments can now be reopened up to 5 years after the end of the relevant financial year, but only if the escaped income exceeds ₹50 lakh.
10. Vivad Se Vishwas Scheme 2024
To reduce tax-related disputes, the government has reintroduced the Vivad Se Vishwas Scheme.
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Taxpayers with pending appeals can settle disputes by paying the disputed tax plus a small percentage
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Once payment is made and Form 1 is submitted, penalties and interest are waived, and the case is closed
Final Words
These new rules will have a direct impact on your salary, savings, investments, and how you file your ITR. Make sure to understand the regime you choose and plan your taxes accordingly.
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