2025 Tax Filing Trends in India: Insights from TaxBuddy
Nimisha Panda- May 13
- 13 min read
The tax filing landscape in India is set to undergo significant changes with the implementation of Budget 2025 amendments, particularly for the FY 2024-25. These changes aim to simplify the filing process, offer tax relief, and enhance compliance. Key amendments include revised income tax slabs, an increased standard deduction, extended filing deadlines, and the introduction of a new Direct Tax Code. Let us explore the latest trends in income tax filing for 2025, including important updates to the ITR forms and filing processes, along with how TaxBuddy is streamlining these changes for taxpayers.
Table of Contents
What are the 2025 Tax Filing Trends in India?
The 2025 tax filing landscape in India, shaped by Budget 2025 and recent Income Tax Department notifications, focuses on easing compliance, providing relief to middle-class taxpayers, and simplifying reporting requirements. TaxBuddy emerges as a leading platform facilitating these changes through expert assistance, AI-driven automation, and user-friendly services. For FY 2024-25, taxpayers benefit from revised slabs, enhanced standard deductions, extended filing timelines, and simplified ITR forms, especially regarding asset reporting and capital gains.
Key Amendments in Budget 2025 Affecting Tax Filing for FY 2024-25
Revised Income Tax Slabs under New Regime
The Budget 2025 has made notable revisions to the income tax slabs under the new tax regime for the financial years FY 2024-25 and FY 2025-26. The revised tax structure is designed to provide significant relief, especially to salaried individuals and middle-class taxpayers. For FY 2024-25, the new income tax slabs are as follows:
Up to ₹3 lakh – NIL (No tax)
₹3 lakh to ₹7 lakh – 5%
₹7 lakh to ₹10 lakh – 10%
₹10 lakh to ₹12 lakh – 15%
₹12 lakh to ₹15 lakh – 20%
Above ₹15 lakh – 30%
For FY 2025-26, these slabs have been revised to offer even more relief:
Up to ₹4 lakh – NIL (No tax)
₹4 lakh to ₹8 lakh – 5%
₹8 lakh to ₹12 lakh – 10%
₹12 lakh to ₹16 lakh – 15%
₹16 lakh to ₹20 lakh – 20%
₹20 lakh to ₹24 lakh – 25%
Above ₹24 lakh – 30%
The key change in FY 2025-26 is the increase in the tax-free limit to ₹4 lakh, making it more beneficial for individuals with moderate incomes. In comparison to the previous structure, the higher income brackets are now taxed at a slightly lower rate, and more taxpayers will benefit from the lower tax rates, especially those earning between ₹12 lakh and ₹24 lakh.
Standard Deduction Increase
Budget 2025 also raised the standard deduction for salaried taxpayers under the new tax regime. This change will be especially beneficial for individuals who choose the new regime, as the standard deduction for FY 2024-25 has been increased to ₹75,000. This move is expected to reduce the taxable income for salaried employees, providing significant savings on taxes. The increase in the standard deduction will help reduce the overall taxable income, ensuring better financial relief for those opting for the new tax regime.
Extended Return Filing Time
A notable amendment in Budget 2025 is the extension of the time limit for filing revised income tax returns (ITRs). The time to file a revised return has been extended from 2 years to 4 years from the end of the relevant assessment year (AY). This means taxpayers now have more flexibility to correct errors or omissions in their filed returns without facing penalties or interest for late submission. The change is a step towards offering more flexibility to taxpayers and encouraging accurate and timely filing.
TDS and TCS Reforms
Budget 2025 also introduced reforms related to Tax Deducted at Source (TDS) and Tax Collected at Source (TCS), aiming to ease compliance for small taxpayers and businesses:
Exemption for Freelancers and Small Businesses: Freelancers and small businesses earning up to ₹5 lakh per annum are exempt from TDS.
TCS on Goods: The TCS on the sale of goods will be removed from April 1, 2025, eliminating the possibility of double taxation.
TDS Threshold for Rent: The threshold for TDS on rent has been raised from ₹2.4 lakh to ₹6 lakh, allowing landlords with lower rental income to avoid TDS deductions.
These reforms will simplify the filing process and reduce the burden of compliance for small businesses and individuals who were previously impacted by TDS and TCS regulations.
Transfer Pricing Simplifications
In a bid to ease the burden on smaller businesses, Budget 2025 introduced simplified transfer pricing rules for businesses engaged in international transactions. Under the new provisions, businesses with transactions below ₹10 crore are now subject to simplified documentation requirements. The introduction of safe harbor rules also offers businesses more predictable and lower compliance costs for cross-border transactions. This move is expected to encourage foreign investment and help businesses operate more efficiently without facing excessive paperwork.
Introduction of the Direct Tax Code
One of the most significant announcements in Budget 2025 is the introduction of the Direct Tax Code (DTC). The DTC aims to modernize and simplify the Indian tax system. By eliminating many ambiguities and streamlining the existing tax laws, the DTC seeks to provide a uniform tax structure. It covers income tax, corporate tax, and capital gains tax, and is designed to create a more transparent and predictable tax regime. The new code is expected to reduce the compliance burden for taxpayers, making the tax filing process more efficient.
Changes in ITR Forms and Filing Process for FY 2024-25
ITR-2 Form Updates
For FY 2024-25, the ITR-2 form, used by individuals and Hindu Undivided Families (HUFs) with income other than business or profession, has undergone several updates. Key changes include:
Schedule AL Reporting: The reporting of assets and liabilities (Schedule AL) is now only required if the total income exceeds ₹1 crore, instead of the previous threshold of ₹50 lakh. This reduces the filing burden for individuals with income between ₹50 lakh and ₹1 crore.
Capital Gains Reporting: The updated form now clearly distinguishes between capital gains on assets transferred before and after July 23, 2024, ensuring taxpayers apply the correct tax rates. This change simplifies the reporting process for taxpayers with capital gains, particularly when the sale date is crucial for the application of different tax rates.
TDS Section Reporting: Taxpayers are now required to specify the section under which TDS has been deducted. This helps ensure that the tax deducted is correctly reflected in the return and avoids discrepancies during processing.
Capital Gains on Unlisted Bonds and Debentures
For FY 2024-25, the treatment of capital gains from unlisted bonds and debentures has been simplified. These gains will now be classified as short-term or long-term based on the transfer date. Previously, the tax treatment for such instruments was less clear, leading to confusion among investors. The new provisions provide a more straightforward approach to calculate and report capital gains on unlisted bonds and debentures, making it easier for taxpayers to comply with tax regulations.
Specific Questions Related to Bank Account Opening Forms and Tax Filing
Is bank account information mandatory for e-filing ITR?
Yes, bank account information is mandatory when e-filing an Income Tax Return (ITR). The Income Tax Department requires bank details linked with PAN and Aadhaar for verification, ensuring that your refund is processed correctly and directly deposited into your account. Additionally, having bank details helps report any interest income and facilitates the filing process, making it smoother and more efficient.
Can e-filing be done without a Digital Signature Certificate (DSC)?
Yes, e-filing can be done without a Digital Signature Certificate (DSC). Taxpayers can file their returns using Aadhaar-based OTP or bank OTP for e-verification. Alternatively, a Physical ITR-V form can be signed and sent to the Central Processing Centre (CPC) in Bangalore for verification. DSCs are optional, but they provide enhanced security and are recommended for individuals who file returns on behalf of multiple clients or businesses.
What documents related to bank accounts are needed for tax filing?
The following bank account documents are needed for tax filing:
Bank statements for the relevant financial year.
Interest certificates issued by banks for income from savings, fixed deposits, etc.
TDS certificates from banks for any tax deducted at source on interest income.
Details of deposits and withdrawals that may impact your taxable income, especially if you’re claiming deductions or reporting capital gains.
These documents ensure that all income from bank transactions is accurately reported, minimizing the risk of errors during tax filing.
How does TaxBuddy simplify tax filing related to bank accounts?
TaxBuddy simplifies the process by allowing users to upload bank statements directly onto the platform. The platform automatically pre-fills the necessary fields in the ITR forms, ensuring that all relevant data, including interest income and other financial transactions, are accurately captured. TaxBuddy also supports Aadhaar and bank OTP-based verification, making the process seamless and reducing the need for manual intervention. Furthermore, TaxBuddy offers expert assistance to resolve any issues that may arise from complex bank-related transactions, ensuring a smooth and hassle-free filing experience.
TaxBuddy’s Role in 2025 Tax Filing Trends in India
Assisted E-Filing with Expert Support
TaxBuddy’s Assisted E-Filing service is a game-changer for taxpayers looking for expert guidance while filing their returns. With a team of ex-IRS officials and Chartered Accountants, TaxBuddy offers personalized support throughout the filing process. This expert assistance is especially valuable for taxpayers dealing with complex tax situations, such as high-income earners, individuals with multiple sources of income, or those navigating new tax regime changes. The experts provide one-on-one consultations to ensure all deductions are accurately claimed, exemptions are fully utilized, and the tax return is filed in compliance with the latest regulations.
TaxBuddy’s team also helps review the tax returns before submission, minimizing the risk of errors or omissions that could lead to delayed processing or penalties. This level of personalized support provides users with confidence, knowing that their tax filing is in the hands of professionals who are up-to-date with the latest tax laws and amendments.
AI-Driven Automation
AI-Driven Automation is at the core of TaxBuddy’s platform, streamlining the tax filing process and reducing the manual effort involved. By leveraging artificial intelligence, TaxBuddy automatically pre-fills ITR forms with relevant data from PAN, Aadhaar, and uploaded documents. This automated data entry not only reduces the chances of human error but also accelerates the filing process.
TaxBuddy’s AI system scans all the documents submitted by the user, such as bank statements, investment proofs, and salary slips, and automatically populates the corresponding sections of the ITR. Additionally, the AI checks for any inconsistencies or missing information, alerting users to potential issues before the form is submitted. This approach ensures that taxpayers can complete their returns with minimal effort, while also ensuring accuracy and compliance with tax regulations.
Post-Filing Support
TaxBuddy doesn’t just stop at e-filing your return; it offers post-filing support to ensure that any issues or notices raised by the Income Tax Department are handled swiftly and effectively. Post-filing services include:
Resolution of Income Tax Notices: If a taxpayer receives a notice from the tax department, TaxBuddy’s expert team provides guidance on how to address the issue, whether it’s regarding tax calculation, mismatched deductions, or late filings.
Tax Audit Assistance: For individuals or businesses subject to a tax audit, TaxBuddy offers expert advice on how to navigate the audit process, ensuring all documentation is properly filed and that the taxpayer complies with the requirements.
Refund Processing: If there are any issues with tax refunds, TaxBuddy steps in to assist with follow-ups and ensures that the refund is processed correctly and promptly.
Post-filing support also includes ongoing advice on tax planning for the following year, ensuring that taxpayers are aware of potential deductions, exemptions, or changes to the tax laws that could impact their returns.
User Convenience
User Convenience is a central focus of TaxBuddy’s platform, providing an intuitive and seamless experience for filing taxes. TaxBuddy’s user-friendly interface allows even first-time filers to navigate the platform with ease. Here are some of the key features designed to enhance user convenience:
Multiple Filing Methods: TaxBuddy supports various filing methods, including Aadhaar OTP, bank OTP, and Digital Signature Certificate (DSC). This flexibility allows users to choose the verification method that best suits their needs and preferences.
Automatic Reminders: To ensure users never miss a deadline, TaxBuddy sends timely reminders for important tax-related dates, including filing deadlines and due dates for advance tax payments. These reminders help users stay on top of their filing requirements without any stress.
Secure Data Handling: TaxBuddy places a high priority on data security, using the latest encryption technologies to ensure that users’ sensitive financial data is protected at all times. This ensures that all personal and financial information is stored securely, maintaining the highest levels of confidentiality and trust.
One-Click Assistance: For those who need help at any point during the filing process, TaxBuddy offers instant chat support and easy access to experts. Users can reach out to professionals for quick clarifications or assistance without needing to leave the platform.
These features, combined with the AI-driven automation and expert support, make TaxBuddy an ideal solution for individuals seeking to file their taxes easily, accurately, and with peace of mind.
Frequently Asked Question (FAQs)
1. What are the key amendments in Budget 2025 that impact tax filing for FY 2024-25?
Budget 2025 introduced several significant amendments that affect tax filing for FY 2024-25, including:
Revised Income Tax Slabs: The tax slabs under the new regime have been adjusted to provide greater relief, especially for middle-income earners.
Increased Standard Deduction: The standard deduction for salaried taxpayers has been increased to ₹75,000, further reducing taxable income.
Extended Return Filing Time: The time to file revised returns has been extended from 2 years to 4 years, offering taxpayers more flexibility.
TDS and TCS Reforms: Key reforms include exemptions for small businesses and freelancers earning up to ₹5 lakh, and changes in TDS thresholds for rental income and sale of goods.
Introduction of the Direct Tax Code (DTC): The DTC aims to simplify and modernize India’s tax laws, streamlining the tax system for individuals and businesses.
2. How have the income tax slabs changed under the new regime for FY 2024-25?
In FY 2024-25, the income tax slabs under the new regime were structured as follows:
Up to ₹3 lakh – NIL
₹3 lakh to ₹7 lakh – 5%
₹7 lakh to ₹10 lakh – 10%
₹10 lakh to ₹12 lakh – 15%
₹12 lakh to ₹15 lakh – 20%
Above ₹15 lakh – 30%
This structure offers tax relief for lower and middle-income groups, with the first ₹3 lakh exempt from tax. It also introduces progressive tax rates aimed at providing greater benefits to individuals earning between ₹3 lakh and ₹12 lakh.
3. What is the new standard deduction limit for salaried taxpayers in FY 2024-25?
For FY 2024-25, the standard deduction for salaried taxpayers under the new tax regime has been increased to ₹75,000. This allows taxpayers to reduce their taxable income by claiming the standard deduction, thus lowering their overall tax liability.
4. How has the return filing deadline been extended for FY 2024-25?
Budget 2025 introduced a major change by extending the deadline for filing revised income tax returns (ITRs). The time limit has been increased from 2 years to 4 years from the end of the relevant assessment year (AY). This extension offers more flexibility to taxpayers to correct mistakes or omissions in their original returns and file updated versions without incurring penalties.
5. What are the recent changes to TDS and TCS in Budget 2025?
Several key TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) reforms were announced in Budget 2025:
Exemption for Small Businesses: Freelancers and small businesses earning up to ₹5 lakh per annum are now exempt from TDS.
Removal of TCS on Goods: The TCS on the sale of goods has been removed from April 1, 2025, reducing the risk of double taxation.
Increased TDS Threshold for Rent: The TDS threshold on rent has been raised from ₹2.4 lakh to ₹6 lakh, allowing individuals with lower rental income to avoid TDS deductions.
These reforms aim to ease the tax burden on small businesses and individuals, simplifying the overall tax filing process.
6. How do the new transfer pricing simplifications benefit businesses?
The new transfer pricing simplifications introduced in Budget 2025 benefit businesses by providing safe harbor rules and simplified documentation for inter-company transactions. These changes apply to businesses with transactions below ₹10 crore, reducing the compliance burden. By streamlining the documentation process and offering more predictable rules, businesses can reduce the administrative costs and time spent on tax filings, particularly those engaged in cross-border transactions.
7. What changes have been introduced to the ITR-2 form for FY 2024-25?
The ITR-2 form for FY 2024-25 has seen several key updates:
Schedule AL Reporting: The reporting of assets and liabilities (Schedule AL) is now required only if total income exceeds ₹1 crore, instead of the previous threshold of ₹50 lakh.
Capital Gains Reporting: The form now includes refined reporting for capital gains, specifically for transactions that occurred before or after July 23, 2024, ensuring correct tax rates are applied.
TDS Reporting: Taxpayers must specify the section under which TDS has been deducted, enhancing transparency and accuracy in reporting.
These updates make the filing process for individuals and HUFs with income other than business or profession more streamlined and user-friendly.
8. How will capital gains on unlisted bonds and debentures be taxed in 2025?
Starting from FY 2024-25, capital gains on unlisted bonds and debentures will be taxed based on the transfer date. Gains from these instruments will now be classified as either short-term or long-term capital gains. This new structure simplifies the taxation process and ensures a clearer, more predictable approach to the taxation of these assets. The tax treatment is designed to provide more clarity, especially for investors involved in these financial instruments.
9. Is linking a bank account mandatory for e-filing ITR?
Yes, linking a bank account is mandatory for e-filing your ITR. The Income Tax Department requires taxpayers to link their bank account with PAN and Aadhaar for identity verification. This also facilitates direct deposit of refunds and ensures that any income from interest is properly reported. The bank account details help with accurate income reporting and verification of deductions related to financial transactions.
10. Can I file my ITR without using a Digital Signature Certificate (DSC)?
Yes, e-filing can be done without a Digital Signature Certificate (DSC). If you do not have a DSC, you can file your return using Aadhaar-based OTP or bank OTP for e-verification. Alternatively, you can sign the ITR-V form physically and send it to the Central Processing Centre (CPC) within 30 days for verification. DSC is an optional method, mainly used for business filers or those with multiple clients.
11. What documents related to bank accounts are required for tax filing?
The key bank account documents required for tax filing include:
Bank account statements for the relevant financial year
Interest certificates from the bank for income from savings, fixed deposits, etc.
TDS certificates for any tax deducted at source by the bank
Details of large deposits or withdrawals that might affect income or capital gains calculations
These documents are essential for accurately reporting interest income, reconciling TDS, and ensuring correct tax calculation for bank-related transactions.
12. How does TaxBuddy simplify the tax filing process for users?
TaxBuddy simplifies the tax filing process by offering AI-driven automation that pre-fills ITR forms using data from PAN, Aadhaar, and uploaded documents. The platform reduces manual data entry and minimizes errors, making the process faster and more efficient. Additionally, TaxBuddy provides expert assistance for complex tax situations, post-filing support for notices or audits, and secure data handling for peace of mind. The platform’s user-friendly interface and flexible filing options (Aadhaar OTP, DSC, etc.) ensure that every taxpayer can file their return with ease, accuracy, and confidence.
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