Revised TDS Rates for FY 2025-26

Tax Deducted at Source (TDS) is one of the most important compliance requirements under the Income Tax Act, 1961. Every year, the government notifies updated rates and provisions that taxpayers, businesses, and professionals must follow while deducting and depositing TDS. For the financial year 2025-26 (AY 2026-27), the TDS rates cover payments such as salary, interest, rent, professional fees, contracts, and more. This updated TDS Rate Chart 2025-26 will help you understand at what rate tax needs to be deducted, thresholds, and key compliances to avoid penalties.

Under Income Tax Act 2025 TDS Rates are covered under Section 390 to 430 and Table chart are used

Rates for tax deduction at source*

[For Assessment year 2026-27]

Particulars TDS Rates (in %)
1. In the case of a person other than a company
1.1 where the person is resident in India-
Section 192: Payment of salary Normal Slab Rate
Section 192A: Payment of accumulated balance of provident fund which is taxable in the hands of an employee. 10
Section 193: Interest on securities
a) any debentures or securities for money issued by or on behalf of any local authority or a corporation established by a Central, State or Provincial Act; 10
b) any debentures issued by a company where such debentures are listed on a recognised stock exchange in accordance with the Securities Contracts (Regulation) Act, 1956 (42 of 1956) and any rules made thereunder; 10
c) any security of the Central or State Government;[i.e. 8% Savings (Taxable) Bonds, 2003 and 7.75% Saving (Taxable) Bonds, 2018, Floating Rate Savings Bonds, 2020 (Taxable) or any other notified security] 10
d) interest on any other security 10
Section 194: Income by way of dividend 10
Section 194A: Income by way of interest other than “Interest on securities” 10
Section 194B: Income by way of winnings from lotteries, crossword puzzles, card games and other games of any sort, or from gambling or betting of any form or nature whatsoever. 30
Section 194BA: Income by way of winnings from any online game 30
Section 194BB: Income by way of winnings from horse races 30
Section 194C: Payment to contractor/sub-contractor
a) HUF/Individuals 1
b) Others 2
Section 194D: Insurance commission 5
Section 194DA: Payment in respect of life insurance policy 2
Section 194EE: Payment in respect of deposit under National Savings scheme 10
Section 194F: Payment on account of repurchase of unit by Mutual Fund or Unit Trust of IndiaNote: The provisions of this section are not applicable with effect from 01-10-2024 20
Section 194G: Commission, etc., on sale of lottery tickets 2
Section 194H: Commission or brokerage 2
Section 194-I: Rent
a) Plant & Machinery 2
b) Land or building or furniture or fitting 10
Section 194-IA: Payment on transfer of certain immovable property other than agricultural land 1
Section 194-IB: Payment of rent by individual or HUF not liable to tax audit 2
Section 194-IC: Payment of monetary consideration under Joint Development Agreements 10
Section 194J:  Fees for professional or technical services:i)  sum paid or payable towards fees for technical servicesii)  sum paid or payable towards royalty in the nature of consideration for sale, distribution or exhibition of cinematographic films;iii)  Any other sumNote: With effect from June 1, 2017 the rate of TDS would be 2% in case of payee engaged in business of operation of call center. 2210
Section 194K: Income in respect of units payable to resident person 10
Section 194LA: Payment of compensation on acquisition of certain immovable property 10
Section 194LBA(1): Business trust shall deduct tax while distributing, any interest received or receivable by it from a SPV or any income received from renting or leasing or letting out any real estate asset owned directly by it, to its unit holders. 10
Section 194LBB: Investment fund paying an income to a unit holder [other than income which is exempt under Section 10(23FBB)] 10
Section 194LBC: Income in respect of investment made in a securitisation trust (specified in Explanation of section 115TCA) 10
Section 194M: Payment of commission (not being insurance commission), brokerage, contractual fee, professional fee to a resident person by an Individual or a HUF who are not liable to deduct TDS under section 194C, 194H, or 194J.Tax shall be deducted under Section 194M with effect from 1/09/2019 when aggregate of sum credited or paid during a financial year exceeds Rs. 50 lakh. 2
Section 194N: Cash withdrawal during the previous year from one or more account maintained by a person with a banking company, co-operative society engaged in business of banking or a post office:i) in excess of Rs. 1 crore#ii) in excess of Rs. 20 lakhs** for those persons who have not filed return of income (ITR) for three previous years immediately preceding the previous year in which cash is withdrawn, and the due date for filing ITR under section 139(1) has expired. The deduction of tax under this situation shall be at the rate of:a) 2% from the amount withdrawn in cash if the aggregate of the amount of withdrawal exceeds Rs. 20 lakhs during the previous year; orb) 5% from the amount withdrawn in cash if the aggregate of the amount of withdrawal exceeds Rs. 1 crore during the previous year.# The threshold limit of Rs. 1 crore is increased to Rs. 3 croresif the withdrawal of cash is made by co-operative society. 22/5
Section 194-O: Payment or credit of amount by the e-commerce operator to e-commerce participant 0.1
Section 194P: Deduction of tax by specified bank in case of senior citizen having age of 75 or more Tax on total income as per rate in force
Section 194Q: Payment for purchase of goods of the aggregate value exceeding Rs. 50 lakhsNote: TDS is deductible on sum exceeding Rs. 50 lakhs 0.1
Section 194R: Deduction of tax in case any benefit or perquisite is provided and aggregate value of such benefit/perquisite exceeds Rs. 20,000Note: Benefit or perquisite should be arising from business or the exercise of a profession by such resident. 10
Section 194S: Payment on transfer of Virtual Digital AssetNote: No tax shall be deducted under this provision in the following circumstance:• If the consideration is payable by any person (other than a specified person) and its aggregate value does not exceed Rs. 10,000 during the financial year.• if the consideration is payable by a specified person and its aggregate value does not exceed Rs. 50,000 during the financial year.Specified person means:(a) An individual or a HUF, whose total sales, gross receipts or turnover does not exceed Rs. 1 crore in case of business or Rs. 50 lakhs in case of a profession, during the financial year immediately preceding the financial year in which virtual digital asset is transferred;(b) An individual or a HUF who does not have any income under the head profits and gains of business or profession. 1
Section 194T: Payments of any sum in the nature of salary, remuneration, commission, bonus or interest to a partner of the firm.Note:(1) This provision is effective from 01-04-2025(2) No deduction if aggregate of such sum paid/payable does not exceed Rs. 20,000 during the financial year. 10
Any Other Income 10
1.2 where the person is not resident in India*-
Section 192: Payment of Salary Normal Slab Rate
Section 192A: Payment of accumulated balance of provident fund which is taxable in the hands of an employee. 10
Section 194B: Income by way of winnings from lotteries, crossword puzzles, card games and other games of any sort or from gambling or betting of any form or nature whatsoever. 30
Section 194BA: Income by way of winnings from any online game 30
Section 194BB: Income by way of winnings from horse races 30
Section 194E: Payment to non-resident sportsmen/sports association 20
Section 194EE: Payment in respect of deposits under National Savings Scheme 10
Section 194F: Payment on account of repurchase of unit by Mutual Fund or Unit Trust of IndiaNote: The provisions of this section are not applicable with effect from 01-10-2024 20
Section 194G: Commission, etc., on sale of lottery tickets 2
Section 194LB: Payment of interest on infrastructure debt fund 5
Sec. 194LBA(2): Payment of the nature referred to in  Section 10(23FC)(a) 5
Section 194LBA(2): Payment of the nature referred to in  Section 10(23FC)(b) 10
Section 194LBA(3): Payment of the nature referred to in section 10(23FCA) by business trust to unit holders 30
Section 194LBB: Investment fund paying an income to a unit holder [other than income which is exempt under Section 10(23FBB)]. 30
Section 194LBC: Income in respect of investment made in a securitisation trust (specified in Explanation of section115TCA) 30
Section 194LC: Payment of interest by an Indian Company or a business trust in respect of money borrowed in foreign currency under a loan agreement or by way of issue of long-term bonds (including long-term infrastructure bond) 5 or 4* or 9*** In case where interest is payable in respect of Long-term Bond or Rupee Denominated Bond listed on recognised stock exchange located in IFSC** Where money borrowed from a source outside India by issuing a long-term bond or rupee-denominated bond on or after 01-04-2023, which is listed only on a recognised stock exchange located in an IFSC
Section 194LD: Payment of interest on rupee denominated bond of an Indian Company or Government securities to a Foreign Institutional Investor or a Qualified Foreign Investor 5
Section 194N: Cash withdrawal during the previous year from one or more account maintained by a person with a banking company, co-operative society engaged in business of banking or a post office:i) in excess of Rs. 1 croreii) in excess of Rs. 20 lakhs** for those persons who have not filed return of income (ITR) for three previous years immediately preceding the previous year in which cash is withdrawn, and the due date for filing ITR under section 139(1) has expired. The deduction of tax under this situation shall be at the rate of:a) 2% from the amount withdrawn in cash if the aggregate of the amount of withdrawal exceeds Rs. 20 lakhs during the previous year; orb) 5% from the amount withdrawn in cash if the aggregate of the amount of withdrawal exceeds Rs. 1 crore during the previous year.   22/5
Section 194T: Payments of any sum in the nature of salary, remuneration, commission, bonus or interest to a partner of the firm.Note:(1) This provision is effective from 01-04-2025(2) No deduction if aggregate of such sum paid/payable does not exceed Rs. 20,000 during the financial year. 10
Section 195: Payment of any other sum to a Non-resident
a) Income in respect of investment made by a Non-resident Indian Citizen 20
b) Income by way of long-term capital gains referred to in Section 115E in case of a Non-resident Indian Citizen, 12.5
c) Income by way of long-term capital gains referred to in sub-clause (iii) of clause (c) of sub-Section (1) of Section 112 12.5
d) Income by way of long-term capital gains as referred to in Section 112A exceeding Rs. 1,25,000 12.5
e) Income by way of short-term capital gains referred to in Section 111A 20
f) Any other income by way of long-term capital gains [not being long-term capital gains referred to in sections 10(33), 10(36)]: 12.5
g) Income by way of dividend from a unit in International Financial Services Centre 10
h) Income by way of dividend [Other than (g)] 20
i) Income by way of interest payable by Government or an Indian concern on moneys borrowed or debt incurred by Government or the Indian concern in foreign currency (not being income by way of interest referred to in Section 194LB or Section 194LC) 20
j) Income by way of royalty payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern where such royalty is in consideration for the transfer of all or any rights (including the granting of a licence) in respect of copyright in any book on a subject referred to in the first proviso to sub-section (1A) of Section 115A of the Income-tax Act, to the Indian concern, or in respect of any computer software referred to in the second proviso to sub-section (1A) of Section 115A of the Income-tax Act, to a person resident in India 20
k) Income by way of royalty [not being royalty of the nature referred to point h) above] payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern and where such agreement is with an Indian concern, the agreement is approved by the Central Government or where it relates to a matter included in the industrial policy, for the time being in force, of the Government of India, the agreement is in accordance with that policy 20
l) Income by way of fees for technical services payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern and where such agreement is with an Indian concern, the agreement is approved by the Central Government or where it relates to a matter included in the industrial policy, for the time being in force, of the Government of India, the agreement is in accordance with that policy 20
m) Any other income 30
Section 196A: Income in respect of units of non-resident 20
Section 196B: Income from units referred to in section 115AB(1)(i) 10
Section 196B: Long-term capital gain on transfer of units referred to in section 115AB, 12.5
Section 196C: Income by way of interest or dividends in respect of bonds or GDR referred to in section 115AC 10
Section 196C: Long-term capital gain arising from transfer of bonds or GDR referred to in section 115AC 12.5
Section 196D: Income of foreign Institutional Investors from securities (not being dividend or capital gain arising from such securities)Note: Tax shall be deducted at the rate provided under DTAA if same is lower than the existing TDS rate of 20%. 20
Section 196D(1A): Income in respect of securities referred to in section 115AD(1)(a) payable to specified fund [referred to in clause (c) of Explanation to section 10(4D)]
Note: Since recipient of income is a specified fund, surcharge & health and education cess shall be nil.		 10
2. In the case of a company-
2.1 where the company is a domestic company-
Section 193: Interest on securities
a) any debentures or securities for money issued by or on behalf of any local authority or a corporation established by a Central, State or Provincial Act; 10
b) any debentures issued by a company where such debentures are listed on a recognised stock exchange in accordance with the Securities Contracts (Regulation) Act, 1956 (42 of 1956) and any rules made thereunder; 10
c) any security of the Central or State Government;[i.e. 8% Saving (Taxable) Bonds, 2003 and 7.75% Saving (Taxable) Bonds, 2018, Floating Rate Savings Bonds, 2020 (Taxable) or any other notified security] 10
d) interest on any other security 10
Section 194: Dividend 10
Section 194A: Income by way of interest other than “Interest on securities” 10
Section 194B: Income by way of winnings from lotteries, crossword puzzles, card games and other games of any sort or from gambling or betting of any form or nature whatsoever. 30
Section 194BA: Income by way of winnings from any online game 30
Section 194BB: Income by way of winnings from horse races 30
Section 194C: Payment to contractor/sub-contractor
a) HUF/Individuals 1
b) Others 2
Section 194D: Insurance commission 10
Section 194DA: Payment in respect of life insurance policyw.e.f. 1/9/2019, the tax shall be deducted on the amount of income comprised in insurance pay-out 2
Section 194EE: Payment in respect of deposit under National Savings scheme 10
Section 194F: Payment on account of repurchase of unit by Mutual Fund or Unit Trust of IndiaNote: The provisions of this section are not applicable with effect from 01-10-2024 20
Section 194G: Commission, etc., on sale of lottery tickets 2
Section 194H: Commission or brokerage 2
Section 194-I: Rent
a) Plant & Machinery 2
b) Land or building or furniture or fitting 10
Section 194-IA:Payment on transfer of certain immovable property other than agricultural land 1
Section 194-IC:Payment of monetary consideration under Joint Development Agreements 10
Section 194J:  Fees for professional or technical services:iv)   sum paid or payable towards fees for technical servicesv)   sum paid or payable towards royalty in the nature of consideration for sale, distribution or exhibition of cinematographic films;vi)   Any other sumNote: With effect from June 1, 2017 the rate of TDS would be 2% in case of payee engaged in business of operation of call center. 2210
Section 194K : Income in respect of units payable to resident person 10
Section 194LA: Payment of compensation on acquisition of certain immovable property 10
Section 194LBA(1): Business trust shall deduct tax while distributing, any interest received or receivable by it from a SPV or any income received from renting or leasing or letting out any real estate asset owned directly by it, to its unit holders. 10
Section 194LBB: Investment fund paying an income to a unit holder [other than income which is exempt under Section 10(23FBB)] . 10
Section 194LBC: Income in respect of investment made in a securitisation trust (specified in Explanation of section115TCA) 10
Section 194M: Payment of commission (not being insurance commission), brokerage, contractual fee, professional fee to a resident person by an Individual or a HUF who are not liable to deduct TDS under section 194C, 194H, or 194J.Tax shall be deducted under Section 194M with effect from 1/09/2019 when aggregate of sum credited or paid during a financial year exceeds Rs. 50 lakh. 2
Section 194N: Cash withdrawal during the previous year from one or more account maintained by a person with a banking company, co-operative society engaged in business of banking or a post office:iii)   in excess of Rs. 1 croreiv)   in excess of Rs. 20 lakhs** for those persons who have not filed return of income (ITR) for three previous years immediately preceding the previous year in which cash is withdrawn, and the due date for filing ITR under section 139(1) has expired. The deduction of tax under this situation shall be at the rate of:a)   2% from the amount withdrawn in cash if the aggregate of the amount of withdrawal exceeds Rs. 20 lakhs but not exceeding Rs. 1 crore during the previous year; orb)   5% from the amount withdrawn in cash if the aggregate of the amount of withdrawal exceeds Rs. 1 crore during the previous year. 22/5
Section 194-O: Payment or credit of amount by the e-commerce operator to e-commerce participant 0.1
Section 194P: Deduction of tax by specified bank in case of senior citizen having age of 75 or more Tax on total income as per rate in force
Section 194Q: Payment to resident for purchase of goods of the aggregate value exceeding Rs. 50 lakhsNote: TDS is deductible on sum exceeding Rs. 50 lakhs 0.1
Section 194R: Deduction of tax in case any benefit or perquisite is provided and aggregate value of such benefit/perquisite exceeds Rs. 20,000Note: Benefit or perquisite should be arising from business or the exercise of a profession by such resident. 10
Section 194S: Payment on transfer of Virtual Digital AssetNote: No tax shall be deducted under this provision in the following circumstance:• If the consideration is payable by any person (other than a specified person) and its aggregate value does not exceed Rs. 10,000 during the financial year.• if the consideration is payable by a specified person and its aggregate value does not exceed Rs. 50,000 during the financial year.Specified person means:(a) An individual or a HUF, whose total sales, gross receipts or turnover does not exceed Rs. 1 crore in case of business or Rs. 50 lakhs in case of a profession, during the financial year immediately preceding the financial year in which virtual digital asset is transferred;(b) An individual or a HUF who does not have any income under the head profits and gains of business or profession. 1
Any Other Income 10
2.2 where the company is not a domestic company*-
Section 194B: Income by way of winnings from lotteries, crossword puzzles, card games and other games of any sort or from gambling or betting of any form or nature whatsoever. 30
Section 194BA: Income by way of winnings from any online game 30
Section 194BB: Income by way of winnings from horse races 30
Section 194E: Payment to non-resident sports association 20
Section 194G: Commission, etc., on sale of lottery tickets 2
Section 194LB: Payment of interest on infrastructure debt fund 5
Section 194LBA(2): – Payment of the nature referred to in  Section 10(23FC)(a) 5
Section 194LBA(2): Payment of the nature referred to in  Section 10(23FC)(b) 10
Section 194LBA(3): Business trust shall deduct tax while distributing any income received from renting or leasing or letting out any real estate asset owned directly by it to its unit holders. 35
Section 194LBB: Investment fund paying an income to a unit holder [other than income which is exempt under Section 10(23FBB)]. 35
Section 194LBC: Income in respect of investment made in a securitisation trust (specified in Explanation of section115TCA) 35
Section 194LC: Payment of interest by an Indian Company or a business trust in respect of money borrowed in foreign currency under a loan agreement or by way of issue of long-term bonds (including long-term infrastructure bond) 5 or 4* or 9*** In case where interest is payable in respect of Long-term Bond or Rupee Denominated Bond listed on recognised stock exchange located in IFSC ** Where money borrowed from a source outside India by issuing a long-term bond or rupee-denominated bond on or after 01-04-2023, which is listed only on a recognised stock exchange located in an IFSC;
Section 194LD:Payment of interest on rupee denominated bond of an Indian Company or Government securities to a Foreign Institutional Investor or a Qualified Foreign Investor 5
Section 195: Payment of any other sum
a) Income by way of long-term capital gains referred to in sub-clause (iii) of clause (c) of sub-Section (1) of Section 112 12.5
b) Income by way of long-term capital gains as referred to in Section 112A exceeding Rs. 1,25,000 12.5
c) Income by way of short-term capital gains referred to in Section 111A 20
f) Any other income by way of long-term capital gains [not being long-term capital gains referred to in sections 10(33), 10(36) and 112A] 12.5
d) Income by way of dividend from a unit in International Financial Services Centre 10
e) Income by way of dividend [Other than (d)] 20
f) Income by way of interest payable by Government or an Indian concern on moneys borrowed or debt incurred by Government or the Indian concern in foreign currency (not being income by way of interest referred to in Section 194LB or Section 194LC) 20
g) Income by way of royalty payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 31st day of March, 1976 where such royalty is in consideration for the transfer of all or any rights (including the granting of a licence) in respect of copyright in any book on a subject referred to in the first proviso to sub-section (1A) of Section 115A of the Income-tax Act, to the Indian concern, or in respect of any computer software referred to in the second proviso to sub-section (1A) of Section 115A of the Income-tax Act, to a person resident in India 20
h) Income by way of royalty [not being royalty of the nature referred to in point f) above] payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern and where such agreement is with an Indian concern, the agreement is approved by the Central Government or where it relates to a matter included in the industrial policy, for the time being in force, of the Government of India, the agreement is in accordance with that policy—
A. where the agreement is made after the 31st day of March, 1961 but before the 1st day of April, 1976 50
B. where the agreement is made after the 31st day of March, 1976 20
i) Income by way of fees for technical services payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern and where such agreement is with an Indian concern, the agreement is approved by the Central Government or where it relates to a matter included in the industrial policy, for the time being in force, of the Government of India, the agreement is in accordance with that policy—
A. where the agreement is made after the 29th day of February, 1964 but before the 1st day of April, 1976 50
B. where the agreement is made after the 31st day of March, 1976 20
j) Any other income 35
Section 196A: Income in respect of units of non-resident 20
Section 196B: Income from units referred to in section 115AB(1)(i) 10
Section 196B: Long-term capital gain on transfer of units referred to in section 115AB 12.5
Section 196C: Income by way of interest or dividends in respect of bonds or GDR referred to in section 115AC 10
Section 196C: Long-term capital gain arising from transfer of bonds or GDR referred to in section 115AC 12.5
Section 196D(1): Income of foreign Institutional Investors from securities (not being dividend or capital gain arising from such securities)Note: Tax shall be deducted at the rate provided under DTAA if same is lower than the existing TDS rate of 20%. 20
Section 196D(1A): Income in respect of securities referred to in section 115AD(1)(a) payable to specified fund [referred to in clause (c) of Explanation to section 10(4D)]Note: Since recipient of income is a specified fund, surcharge & health and education cess shall be nil. 10

__________________________

Dates Announced for the 56th GST Council Meeting in September 2025

As India gears up for the festive season, all eyes are on the upcoming 56th GST Council Meeting scheduled in September 2025 in New Delhi. The meeting comes in the backdrop of Prime Minister Narendra Modi’s “Diwali gift”announced on Independence Day—sweeping GST reforms aimed at simplifying the tax structure and reducing rates to ease the burden on citizens. With a proposal to shift most goods into the lower 5% and 18% slabs, the Council’s deliberations are expected to play a crucial role in shaping how and when these reforms will be rolled out, making this session one of the most significant in recent years.

Know the announcements by PM Modi:

 

 

 

The Goods and Services Tax (GST) Council has officially notified that its 56th meeting will be held on:

  • Wednesday, 3rd September 2025 (from 11:00 AM onwards)
  • Thursday, 4th September 2025 (from 11:00 AM onwards)

at New Delhi.

Officers’ Meeting Prior to Council Meeting

Ahead of the Council meeting, an Officers’ Meeting has also been scheduled for:

  • Tuesday, 2nd September 2025 (from 11:00 AM onwards) in New Delhi.

Agenda and Venue

  • The detailed agenda items and venue for the 56th GST Council Meeting and the Officers’ Meeting will be communicated in due course of time.
  • The Hon’ble Members of the GST Council have been requested to attend the meeting.

Why This Meeting is Important?

The GST Council meetings are crucial as they decide on:

  • Rate rationalisation and structural changes
  • Clarifications on GST law and compliance
  • IT system upgrades and taxpayer facilitation
  • Policy measures impacting both businesses and consumers

With India’s dynamic indirect tax system, the 56th GST Council meeting is expected to bring key policy directions and reforms that may shape the GST landscape ahead of FY 2025-26.

July 2025 GST & Tax Compliance Schedule

As we step into July 2025, several key tax and regulatory deadlines are scheduled for the month. With new rules under GST, extended ITR deadlines, and labour law filings, staying on top of compliance is critical to avoid penalties and interest.

Here’s your complete compliance guide for July 2025, covering GST, TDS/TCS, Income Tax, EPF/ESIC, and other legal returns.

🔷 1. GST Compliance – July 2025

✅ Key Deadlines:

📆 Date 📋 Form 📌 Details
10 July GSTR-7 / GSTR-8 For TDS deductors and e-commerce operators (June 2025)
11 July GSTR-1(M) Monthly filers (June 2025)
13 July GSTR-1(Q) / GSTR-6 / GSTR-5 QRMP Scheme GSTR-1(Q1: Apr–Jun) , ISD & non-residents
18 July CMP-08 Quarterly return for composition dealers (Q1: Apr–Jun)
20 July GSTR-3B/GSTR-5A Monthly filers (June 2025)
22 / 24 July GSTR-3B Quarterly filers (state-wise staggered dates) (Q1: Apr–Jun)
31 July Pending GST Returns Final opportunity to file pending GST returns older than 3 years (per new rule effective 1st July 2025)

⚠️ Important GST Updates:

  • From 1st August 2025, returns older than 3 years from due date cannot be filed.
  • Auto-populated data from GSTR-1/IFF in GSTR-3B will be locked from July 2025 return period
  • Late filing or ITC mismatches can result in notices, penalties, or loss of credit.

🧾 2. TDS / TCS & Income Tax Compliance – July 2025

📆 Important Due Dates:

📅 Date 🧾 Compliance
7 July Deposit of TDS & TCS for June 2025
15 July – Issue Q1 TCS statement (Form 27EQ)
– Issue Form 16B/16C/16D for May 2025
– Upload Form 15G/15H declarations
– Q1 Advance Tax for 44AD/44ADA taxpayers
– File Form 10BBB, 3BB (stock exchanges)
30 July – TDS/TCS challan-cum-statements (194IA/IB/IM/IS)
– Issue TCS Certificate (Form 27D)
31 July – File Q1 TDS returns (Form 24Q, 26Q, 27Q)
– Last date to pay self-assessment tax for AY 2025–26 (non-audit) to avoid interest under Section 234A/B/C
– ITR filing due date has been extended to 15 September 2025, but tax must be paid by 31 July

🚨 Alert:

Even though the ITR filing deadline for individuals (non-audit) is extended to September 15, you must pay your tax dues by 31 July 2025 to avoid interest or penalty.

🏢 3. Labour Law & Miscellaneous Compliance – July 2025

📅 Date 📄 Compliance / Region
1 July Half-yearly return under Factory Act (Ladakh)
5 July Kerala Labour Welfare Fund contribution
10 July Professional Tax RC payment (Andhra Pradesh, MP, Telangana)
14 July Industrial establishment half-yearly returns (Assam)
15 July PF & ESI payment and return due (Pan India)
Factory Act half-yearly returns (multiple states)
20–30 July State-wise returns under CLRA, PT, LWF, etc.

🆕 4. Major Compliance Changes Effective July 2025

🔸 GST Returns Time-Barred After 3 Years

  • From 1 July 2025, no GST return can be filed after 3 years from its original due date
  • E.g., Return for June 2022 (due in July 2022) will be time-barred after 31 July 2025

🔸 ITR Filing Deadline Extended – But Tax Payment Not

  • ITR filing deadline for non-audit taxpayers = 15 September 2025
  • But to avoid Section 234A/B/C interest, pay final tax by 31 July 2025

ROC (Companies & LLP) Annual Compliance

For FY ending 31 Mar 2025, with standard AGM by 30 Sep 2025 :

Form / Act Due Date
AGM (All companies except OPC) By 30 September 2025
ADT-1 (Auditor Appointment) Within 15 days post-AGM → 15 October 2025
AOC-4 (Financial Statements) Within 30 days of AGM → 30 October 2025
MGT-7 / MGT-7A(Annual Return) Within 60 days of AGM → 29 November 2025
DPT-3 (Return of Deposits) Due 30 June 2025
DIR-3 KYC (Director KYC) Due by 30 September 2025
MSME-1 (Half-yearly return) 30 Apr 2025 & next by 31 Oct 2025
CRA-4 (Cost Audit) Within 30 days of report receipt
MGT-14 (Resolutions) Within 30 days of passing

Penalties are hefty—₹100 per day with no cap for late AOC-4/MGT-7 filings; director disqualification & legal consequences apply .

Stay alert this July! With so many deadlines and new restrictions kicking in, compliance is more important than ever. Whether you’re filing GST returns, TDS, or your income tax, follow the timeline to avoid unnecessary penalties.

Key GST Updates Effective from 1st July 2025

As the new quarter begins, taxpayers must prepare for critical GST compliance reforms taking effect from 1 July 2025. These include non-editable GSTR-3B, a 3-year filing cut-off, and upgraded e-way bill systems, along with the closing window for the GST Amnesty Scheme and GSTR-4 filing grace period.

✅ 1. GSTR-3B Will Become Non-Editable (New Auto-Population Rule)

Effective From: Returns for July 2025 period (filed in August 2025)

  • GSTR-3B liability values will be auto-populated from GSTR-1, IFF, or GSTR-1A
  • These values will be non-editable
  • Errors must be corrected via Form GSTR-1A (newly introduced) before filing GSTR-3B

📌 Action Required: Carefully review GSTR-1/IFF data and amend via GSTR-1A if needed
📅 Reference Advisory Date: 7th June 2025

✅ 2. 3-Year Limit for Filing Past GST Returns (No More Backfiling)

Effective From: 1 August 2025 (for returns due ≥3 years ago)

Returns covered:

GST Return Type Blocked From Filing After
GSTR-1 / IFF June 2022
GSTR-3B June 2022
GSTR-4 FY 2021–22
GSTR-5 to GSTR-8 June 2022
GSTR-9 / 9C FY 2020–21

🛑 If not filed by 31st July 2025, these returns will be permanently barred from the portal.

📅 Reference Advisory Date: 18th June 2025

✅ 3. E-Way Bill Portal 2.0 Goes Live (Inter-Operable with 1.0)

Launch Date: 1 July 2025
New Portal: ewaybill2.gst.gov.in

🔄 Fully integrated with E-Way Bill 1.0 for:

  • Generating or extending E-Way Bills
  • Updating vehicle or transporter info
  • Creating consolidated E-Way Bills
  • API-based access for businesses

✅ Syncs both portals in real-time
✅ Ensures business continuity during outages

📅 Reference Advisory Date: 16th June 2025

⏳ 4. GSTR-4 Filing Deadline: 30 June 2025

  • GSTR-4 (for composition taxpayers) for FY 2024–25 must be filed by 30 June 2025
  • After 30 June, returns can still be filed but with late fees
  • Avoid penalty by filing on or before deadline

🚨 5. GST Amnesty Scheme Ends on 30 June 2025

If you have old pending GST returns, late fees, or are eligible for reduced penalties, take advantage of the GST Amnesty Scheme before it expires.

🔐 Last Date to Avail Amnesty: 30 June 2025
📝 Covers non-filers and delayed filers with partial or full waiver of late fee (as per scheme conditions)

 

🧾 Summary: What You Need To Do Before 1 July 2025

Task Deadline Action
File GSTR-4 for FY 2024–25 30 June 2025 Avoid late fees
Avail GST Amnesty Scheme 30 June 2025 File pending returns with reduced late fees
File returns older than 3 years 31 July 2025 Prevent permanent block from 1 August
Prepare for non-editable GSTR-3B From 1 July 2025 Start using GSTR-1A for corrections
Update E-Way Bill APIs From 1 July 2025 Use new portal for improved functionality

🗓️ GST DUE DATES FOR JULY 2025

📆 Due Date 🧾 Form 📝 Description
10 July GSTR‑7 TDS return under GST
10 July GSTR‑8 TCS return by e-commerce operators
11 July GSTR‑1 Monthly return for outward supplies (turnover > ₹5 Cr)
13 July GSTR‑1
& GSTR-5		 QRMP scheme (for June Qtr)
13 July GSTR‑6 GSTR‑3B
20 July GSTR‑3B
& GSTR-5A		 Monthly return (taxpayers > ₹5 Cr or opted for monthly)
22 July GSTR‑3B Quarterly filers (QRMP) for Group A states (Chhattisgarh, MP, Gujarat, Maharashtra, Karnataka, Goa, Kerala, TN, Telangana, Andhra Pradesh, etc.)
24 July GSTR‑3B Quarterly filers (QRMP) for Group B states (Delhi, Punjab, Haryana, HP, JK, UP, Uttarakhand, WB, NE states, Bihar, Jharkhand, Rajasthan)
30 July ITC-04 Job work declaration for April–June 2025 (if applicable)
15 Costly GST Mistakes You Could Be Making While Filing Your Returns! Don’t Miss This Check

Even well-intentioned taxpayers face GST penalties due to complex rules and overlooked compliances. Here are 15 major GST return violations—many of which are not visible at surface level but can cause notices, ITC reversal, interest, or even audit.

1. ❌ Wrong Filing in GSTR-1 Auto-Populates Incorrect GSTR-3B

Once you file GSTR-1 wrongly, it auto-fills 3B, and with portal restrictions increasing, manual corrections may not be allowed. Avoid mismatch in output tax and outward supplies.

2. ⚠️ Non-Reversal of ITC under Rule 37A – Supplier Didn’t Pay Tax

Rule 37A mandates reversal of ITC if the supplier doesn’t deposit GST in their GSTR-3B by the 30th November of the next financial year. Recipient must track compliance of vendors or risk reversal and interest!

3. 📉 No Reconciliation with GSTR-2B

2B is the final document for eligible ITC—not 2A. Ignoring reconciliation will lead to over-claimed ITC, which the system or officers can catch, leading to reversal with penalty.

4. 💸 Purchase from Cancelled GSTINs

Claiming ITC on purchases from suppliers whose GSTIN is cancelled is invalid. This is easy to overlook unless vendor status is regularly checked on the portal.

5. 🔐 Non-Compliance with Rule 86B

If monthly turnover exceeds ₹50 lakh, 1% of GST must be paid in cash. Ignoring this can lead to system restrictions or filing blockage.

6. 📆 Failure to Pay Vendors Within 180 Days

Under Section 16(2), if payment isn’t made within 180 days, ITC must be reversed with interest, and can only be reclaimed after actual payment. This is a red flag in assessments.

7. 🧮 ITC Reversal for Exempt Supplies Not Done (Rule 42/43)

If you deal in both taxable and exempt goods/services, a proportionate reversal under Rule 42 (inputs/services) & 43 (capital goods) is mandatory, but frequently skipped.

8. 🪙 Miscellaneous Incomes Not Reported

Scrap, commission, penalties, forex gains — all such miscellaneous incomes are taxable. They must be disclosed in outward supplies or else mismatches will occur with ITR.

9. 🔍 No GST Paid on Advance Received

For certain goods and all services, GST is applicable on advance receipt. If not declared properly, mismatches between books and GSTR-1/3B arise.

10. 🧾 RCM Liability Ignored on Common Expenses

Expenses like freight (GTA), advocate fees, rent from unregistered persons, director remuneration may attract RCM. Not discharging this liability = non-compliance + ITC ineligibility.

11. 🧯 Incorrect Valuation of Related Party Transactions

Even if no consideration is involved, GST valuation rules apply to transactions with sister companies, branches, or directors. Use open market value or Rule 28 provisions.

12. 🧷 Late GSTR-1 Filing – No Late Fee, But Notice Still Possible

Many think they’re safe if no late fee shows on portal, but officers can issue notice under Section 46 or 122, demanding penalty for late filing.

13. 🧾 Capital Goods Supplied but ITC Not Reversed as per Rule 40(2)

When capital goods or plant & machinery are sold, transferred, or disposed of, the remaining Input Tax Credit must be reversed.

As per Rule 40(2) of CGST Rules, ITC is reduced by 5% per quarter (or part) from the date of invoice till the date of disposal. If not reversed or taxed correctly, this attracts GST audit objections and recovery with interest.

Example: If a machine purchased in Jan 2023 is sold in June 2025 (i.e., 10 quarters later), 50% of ITC (5% × 10) must be reduced from the originally claimed ITC, and only the balance can be retained or taxed on the transaction value—whichever is higher.

14. 📊 Wrong HSN/SAC Code Reporting

Incorrect HSN/SAC leads to rate mismatch, especially now with auto-mapping of e-invoices & e-way bills. Mandatory HSN disclosure applies to most taxpayers.

15. 🧾 Incorrect Reporting in Table 4 of GSTR-3B

Misplacing RCM ITC, import ITC or credit notes in wrong heads can lead to mismatches in GSTR-9 and audit flags.

 

Situations Where ITR Filing Won’t Be Required in 2025

Every year, the Income Tax Department of India updates its rules and requirements for filing Income Tax Returns (ITR). For Assessment Year 2025-26 (Financial Year 2024-25), it’s important to understand who is exempt from filing ITRbased on their income sources and limits.

In this article, we will explain which individuals do not need to file ITR in 2025, and under what conditions this exemption is allowed.

 

Individuals with Income Below the Taxable Limit

If your total income from all sources is below the basic exemption limit, you are not required to file an ITR.

Basic Exemption Limits (FY 2024-25):

Category New Tax Regime Old Tax Regime
Individuals below 60 years ₹3,00,000 ₹2,50,000
Senior Citizens (60–80 years) ₹3,00,000 ₹3,00,000
Super Senior Citizens (above 80 years) ₹3,00,000 ₹5,00,000

Example: If a 59-year-old individual has an annual income of ₹2.90 lakh and does not claim any deductions or exemptions, they are not required to file ITR.

Individuals with Only Interest or Pension Income and No TDS

If your income comes only from savings account interest, fixed deposits, or pension and no TDS has been deducted, and your income is within the exemption limit, then filing ITR is not mandatory.

Individuals with Only Agricultural Income (Below Limit)

If you have only agricultural income, and it is below ₹5,000, you are not required to file ITR.

However, if your agricultural income exceeds ₹5,000, and your non-agricultural income exceeds the basic exemption limit, ITR filing becomes mandatory under the rule of partial integration.

 

Housewives or Students with No Taxable Income

If a housewife or student has no taxable income or only receives gifts, allowances, or pocket money from family (which are not taxable), then there is no need to file an ITR.

NRIs with No or Minimal Indian Income

Non-Resident Indians (NRIs) who do not earn income in India, or whose Indian income is less than ₹2.5 lakh, are not required to file an ITR.

Income Only from Dividends and Savings Interest Below Limit

If your income comes only from dividends and savings interest and it remains below the basic exemption limit, then filing ITR is not necessary.

ITR Filing Not Required for Specified Senior Citizens – Section 194P

Section 194P of the Income Tax Act (introduced from FY 2021–22) provides relief to certain senior citizens (75 years or above) from filing ITR if the following conditions are met:

Eligibility for ITR Exemption under Section 194P:

  1. The individual is a Resident Senior Citizen aged 75 years or above.
  2. The senior citizen has only pension income and interest income from the same bank.
  3. The senior citizen has submitted a declaration to the bank in a prescribed form.
  4. The bank is a specified bank notified by the Income Tax Department.
  5. The bank computes and deducts tax on such income after giving effect to deductions (like 80C, 80D, etc.).

✅ If all conditions are satisfied, the senior citizen is not required to file an ITR. The bank is responsible for deducting the appropriate tax.

📌 Example:

Mr. Sharma, aged 77, earns:

  • ₹4.8 lakh pension,
  • ₹1 lakh interest from the same SBI branch,
  • Submits Form 12BBA to SBI for deductions and tax computation.

👉 In this case, SBI will deduct tax, and Mr. Sharma is exempt from filing ITR.

Situations Where ITR Filing is Mandatory Despite No/Zero Income

Even if your income is below the exemption limit, you must file ITR if:

  • You are a director in a company or partner in an LLP
  • You have deposited over ₹1 crore in a bank account in a year
  • You spent over ₹2 lakh on foreign travel
  • Your electricity bill exceeds ₹1 lakh in a year
  • TDS Deducted of Rs.25000 or more (Rs.50000 for senior citizens)
  • If Turnover of business is 60 Lakh or more and receipts from profession is 10 lakh of more
  • You are claiming a tax refund

Exemption from ITR filing is available to specific categories of taxpayers based on their income type and amount. If you fall under any of the above categories and your income is below the threshold, you are not required to file an ITR.

However, filing ITR is always beneficial, even when not mandatory. It helps in:

  • Getting loans
  • Visa applications
  • Income proof for future references
  • Claiming TDS refunds

Therefore, take an informed decision after understanding your income structure.

Recover Your GST ITC on Rejected Invoices & Credit Notes | Latest IMS Update

With the implementation of the Input Services Matching (IMS) functionality under GST, taxpayers now have better control and visibility over their Input Tax Credit (ITC). However, challenges arise when records are inadvertently rejected on IMS. This article addresses key queries and solutions regarding wrongly rejected documents such as Invoices, Debit Notes, ECO-documents, and Credit Notes.

 

📌 Question 1:

 

How can a recipient avail ITC of wrongly rejected Invoices/Debit notes/ECO-Documents in IMS when GSTR-3B of the same period has already been filed?

✅ Solution:
The recipient should request the supplier to report the same document (unchanged) in:

  • GSTR-1A of the same return period, or
  • Amendment table of GSTR-1/IFF of a subsequent period.

Once this is done, the recipient can accept the amended record on IMS and recompute GSTR-2B, thereby becoming eligible to claim full ITC of the re-reported record.

🧾 Note: ITC will only reflect in the GSTR-2B of the concerned tax period in which the record is furnished again.

📌 Question 2:

If an original record is wrongly rejected by the recipient and is re-furnished by the supplier, what will be the impact on the supplier’s liability?

✅ Clarification:
If the same value is re-furnished in:

  • GSTR-1A of the same period, or
  • Amendment table of a future GSTR-1/IFF,

Then the supplier’s liability will not increase, since the amendment reflects only the delta value (i.e., the net change, which is zero in this case). Thus, there is no additional tax liability on the supplier.

📌 Question 3:

How can a recipient reverse ITC of a wrongly rejected Credit Note in IMS if GSTR-3B is already filed?

✅ Solution:
The recipient should request the supplier to re-furnish the same Credit Note (unchanged) either in:

  • GSTR-1A of the same return period, or
  • Amendment table of subsequent GSTR-1/IFF.

Upon accepting the CN on IMS and recomputing GSTR-2B, the recipient’s ITC will get reduced by the entire value of the CN.

📌 Question 4:

What is the supplier’s liability if a rejected Credit Note is re-furnished?

✅ Clarification:
Initially, the supplier’s liability increases due to rejection of the CN.
However, once the same CN is re-furnished, the liability gets reduced again, ensuring that the net liability effect is only once.

📌 Summary Table

Case Action by Supplier Action by Recipient ITC/Liability Effect
Rejected Invoice/DN Re-furnish in GSTR-1A or amend Accept & recompute GSTR-2B Full ITC available again
Rejected CN Re-furnish same CN Accept & recompute GSTR-2B ITC reversed fully
Supplier’s liability Same value furnished – No double liability
GST Advisory: Filing of Old Returns to Be Blocked from August 2025

In accordance with the amendments introduced through the Finance Act, 2023 (No. 8 of 2023), dated 31st March 2023, and implemented with effect from 1st October 2023 via Notification No. 28/2023 – Central Tax, dated 31st July 2023, a critical compliance update has been enforced for all GST-registered taxpayers.

 

 

⚠️ Key Compliance Alert

Taxpayers shall not be allowed to file GST returns after the expiry of three years from the original due date of furnishing the said return. This time limit is applicable for returns filed under the following sections of the CGST Act:

  • Section 37 – Outward Supplies (e.g., GSTR-1, IFF)
  • Section 39 – Monthly/Quarterly Returns and Payment of Liability (e.g., GSTR-3B, GSTR-4, GSTR-5, GSTR-5A, GSTR-6)
  • Section 44 – Annual Return (e.g., GSTR-9, GSTR-9C)
  • Section 52 – Tax Collected at Source (e.g., GSTR-7, GSTR-8)

Accordingly, the filing of these returns will be barred after three years from their respective due dates.

📅 Effective Date of Restriction

This provision will be implemented on the GST portal starting with the July 2025 tax period. Therefore, any pending return with a due date falling before August 1, 2022, will become non-fileable on or after 1st August 2025.

🗓️ Advisory Note Issued Earlier: GSTN had already issued an advisory regarding this change on October 29, 2024, to help taxpayers prepare in advance.

📌 Illustrative Table of Returns That Will Be Barred from August 1, 2025

GST Return Form Latest Period That Will Be Barred (w.e.f. 1st August 2025)
GSTR-1 / IFF June 2022
GSTR-1 (Quarterly) April – June 2022
GSTR-3B (Monthly) June 2022
GSTR-3B (Quarterly) April – June 2022
GSTR-4 FY 2021–22
GSTR-5 June 2022
GSTR-6 June 2022
GSTR-7 June 2022
GSTR-8 June 2022
GSTR-9 / 9C FY 2020–21

✅ Advisory to Taxpayers

All taxpayers who have not yet filed their returns for the above-mentioned periods are strongly advised to take immediate action:

  • Review and reconcile your GST records.
  • Identify pending returns that are older than three years from their respective due dates.
  • File such returns without delay to avoid permanent loss of filing rights and potential non-compliance consequences.

🙏 Conclusion

This is a crucial opportunity for defaulting taxpayers to regularize their GST compliance before the three-year time bar becomes effective from 1st August 2025. No further extensions or relief will be available for such late returns after this deadline.

Act now to avoid irreversible compliance gaps.

Thanking You,
Team EasySmartShop

9 Key Updates in ITR-1, ITR-2, ITR-3 & ITR-4 for FY 2024-25 (AY 2025-26) You Should Know Before Filing

The Income Tax Department has notified the income tax return forms for FY 2024-25 (AY 2025-26), incorporating the changes in tax laws announced in the July 2024 budget. However, taxpayers will have to wait for the release of the ITR filing e-utilities on the income tax portal to file their ITR.

ET Wealth Online explains the nine changes made in this year’s ITR forms that will make your ITR filing process easier for FY 2024-25 (AY 2025-26).
Changes in ITR forms for FY 2024-25 (AY 2025-26)

1. Expansion of eligibility to file ITR 1 and ITR 4: This year, the Income Tax Department has expanded the eligibility by relaxing the eligibility criteria, making more taxpayers eligible to file their tax return using ITR 1 and ITR 4. The new rules allow even taxpayers with long-term capital gains from equity and equity mutual funds to file a tax return using ITR1 and ITR 4 (as applicable), provided the capital gains do not exceed Rs 1.25 lakh.

Expert says, “The Budget 2024 increased the LTCG exemption limit on listed equity and equity mutual funds from Rs 1 lakh to Rs 1.25 lakh. In previous years’ ITR forms, even if a taxpayer’s LTCG under Section 112A was within the exemption limit and there was no tax payable, the presence of capital gains income made them ineligible to file the simpler ITR-1 forms. Instead, they were required to file the return in ITR-2 or ITR-3 forms, which are more complex and time-consuming. This resulted in a genuine hardship for small taxpayers. To address this, the Central Board of Direct Taxes (CBDT) has notified that taxpayers are eligible for filing ITR-1 and ITR 4, even if they have LTCG under Section 112A, provided the total LTCG does not exceed Rs 1.25 lakh and there is no brought forward or carry forward capital loss. This move eases the compliance burden and simplifies return filing for small taxpayers with limited capital gains with no losses to be brought forward.”

2. Aadhaar enrolment ID not acceptable: One of the quiet changes made in Budget 2024 was removal of the acceptance of the Aadhaar enrolment ID for the PAN application, and also at the time of filing the ITR. Post this amendment, PAN applications and ITRs can no longer be filed using Aadhaar enrolment ID instead of the actual Aadhaar number. This year’s income tax return forms (ITR 1, ITR 2, ITR 3 and ITR 5) have been amended to remove the column to enter the Aadhaar enrolment ID.

Expert says, “The ITR forms for FY 2024-25 (AY 2025-26) do not have the Aadhaar Enrolment ID column this year. If the taxpayers do not have an Aadhaar number, then they will not be able to file ITR this year.”

3. Opting out of new tax regime by small business owners: Taxpayers having business income cannot switch/choose tax regimes every financial year, unlike individuals who don’t have business income. As per the income tax rules, taxpayers having business income have once in a lifetime option to switch from the old to the new tax regime. However, this switching requires submission of a form to the tax department.

Expert says, “The previous year ITR-4 simply asked whether the taxpayer had opted out of the new tax regime. If yes, then the taxpayer was required to provide the date and acknowledgement number of Form 10-IEA if applicable. However, the ITR-4 for FY 2024-25 (AY 2025-26) has introduced a more detailed disclosure. It now seeks confirmation of past filings of Form 10-IEA and asks whether the taxpayer wants to continue opting out of the new Tax Regime in the current year.”

4. Mention TDS section in ITR form: This year’s income tax return forms (ITR 1, ITR 2, ITR 3 and ITR 5) require taxpayers to mention the TDS section under which tax was deducted from the income earned in FY 2024-25.
Expert says, “The requirement to mention the TDS section in the ITR form is applicable if tax is deducted on income other than salary. Earlier, there was no requirement to mention the TDS section in the ITR form while claiming the tax credit. However, from this year, a taxpayer must mention the section under which the benefit of TDS credit is being taken.”

5. New capital gains rules incorporated in ITR forms: Budget 2024 announced new capital gains rules, effective July 23, 2024. Hence, if you have made capital gains by selling listed or unlisted shares, equity mutual funds, houses, land, or any other capital asset, then the date of sale is important to calculate the correct capital gains amount and the appropriate tax on it.

Expert says, “Taxpayers should check the date of sale and transfer of the capital asset to know whether the tax will be calculated based on the old rules or new rules. If the transfer date is before July 23, 2024, the old tax provisions will continue to apply, including the 15% tax rate on STCG covered under Section 111A, the 20% tax rate on LTCG covered under Section 112 with indexation benefit, and the 10% tax rate on LTCG under Section 112A. However, if the transfer occurs on or after 23rd July 2024, new tax provisions will apply. The ITR form requires a disclosure of the date of transfer, separate reporting for transfers made before and on or after 23rd July 2024, and the proper application of revised tax rates and indexation rules.”

If you have capital gains, then income from them will be reported in ITR 2, ITR 3 and ITR 5, as applicable.

6. Separate reporting for capital gains from unlisted bonds and debentures: Budget 2024 changed the taxation rules for unlisted bonds and debentures. The new rules are effective July 23, 2024.

Expert says, “According to the new rules, if unlisted debentures or bonds were issued on or before July 22, 2024, but redeemed, matured, or transferred on or after 23rd July 2024, the entire gain will be taxed as short-term capital gains, regardless of the holding period. As per the new rules, the gains will be taxed at the income tax slab rates applicable to your income. However, if the maturity, redemption or transfer occurs before July 23, 2024, the resulting gain will be classified as long-term and taxable according to the old provision. Under the old rules, the capital gains will be taxed at 20% with indexation benefit.”

The reporting of capital gains from unlisted bonds and debentures has to be done in ITR-2, ITR-3 or ITR-5, as applicable.

7. Reporting of buy-back proceeds as deemed dividends: From October 1, 2024, the amount received on the buy-back of shares by domestic listed companies will be considered as deemed dividends in the hands of shareholders. The new rule was announced in Budget 2024.

Expert says, “ITR-2, 3 and 5 have been amended so that shareholders can report the buy-back proceeds as dividend income under the section ‘Income from other sources’. Under the capital gains schedule, the taxpayers will be required to report zero as sale proceeds so that the cost of acquiring shares results in a capital loss. This capital loss can be brought forward and set off against other long-term capital gains for the next eight assessment years.”

8. Providing disability certificates for deduction under Section 80DD and 80U: Under the old tax regime, a taxpayer could claim a deduction under Section 80DD or Section 80U for expenditure made for disabled individuals. This year, a taxpayer claiming any of the deduction is required to provide acknowledgement number of the disability certificate as well.

Expert says, “Till previous years, a taxpayer could claim a deduction under Section 80DD or Section 80U by quoting the Form 10-IA as per income tax rules. However, from this year, taxpayer is also required to provide acknowledgement number of disability certificates along with Form 10-IA to claim deduction.”

Section 80DD can be claimed by a resident individual or HUF who incurs medical expenditure or pays an insurance premium for the care of a dependent family member with a disability or severe disability.
The deduction under Section 80U is available to a resident individual who is himself suffering from a disability or severe disability.

Expert says, “This reporting requirement is applicable only if ITR-2 and ITR-3 is filed. There is no reporting requirement if the taxpayer files ITR-1.”

9. Asset reporting applicable if total income exceeds Rs 1 crore: There is good news for taxpayers having income above Rs 50 lakh. From this year, a taxpayer is required to report their assets and liabilities only if the gross total income exceeds Rs 1 crore.

Expert says, “Earlier, a taxpayer was required to report their assets and liabilities if their gross total income exceeded Rs 50 lakh in a financial year. However, from this year, the reporting in Schedule AL will be mandatory only if gross total income exceeds Rs 1 crore.”

The reporting in Schedule AL can be done in the ITR 2 and ITR 3.

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28+ Frequent Errors to Steer Clear of While Filing ITR in 2025

Filing your Income Tax Return (ITR) is more than a compliance task—it impacts your financial credibility, refund eligibility, and legal standing. Unfortunately, many taxpayers make avoidable errors while filing their returns, leading to defective filings, penalties, or missed benefits.

Below is a detailed guide to help you avoid the most common ITR filing mistakes.

1. Choosing the Wrong ITR Form

Each ITR form is designed for a specific category of taxpayers and types of income.

For example, ITR-1 is meant only for resident individuals with income from salary, one house property, LTCG from sale of listed shares u/s 112A upto 1.25 Lakhs and other sources, provided total income does not exceed ₹50 lakh and there are no other capital gains or foreign income. Filing ITR-1 when you actually have capital gains, foreign income, or are a director in a company would make your return invalid. The Income Tax Department may treat it as defective under Section 139(9), and you may be required to file a revised return using the correct form, delaying the process and possibly attracting scrutiny.

2. Incorrect Determination of Residential Status

Many individuals, especially NRIs and those frequently traveling abroad, often misclassify their residential status. This leads to incorrect reporting of global income. As per Section 6 of the Income Tax Act, factors like the number of days spent in India during the current and preceding years determine your residential status. A person might believe they are an NRI but may actually qualify as a resident, making global income taxable. Errors in this classification can result in significant tax implications and interest liability.

 

3. Outdated Personal Details

Failing to update your contact details such as email address, mobile number, or residential address in the income tax portal can lead to serious issues. Tax refunds may get delayed, and you may miss important notices or updates from the Income Tax Department. Additionally, if your bank KYC is outdated, refund credits can fail. Always ensure your personal details are current across both the Income Tax portal and linked bank accounts.

4. Missing the Filing Deadline

Many taxpayers either procrastinate or underestimate the importance of filing their ITR by the due date, which is generally 31st July for individual taxpayers not subject to audit. Filing late attracts a penalty under Section 234F, interest on tax dues under Sections 234A, 234B, and 234C, and the inability to carry forward certain losses like house property loss or capital loss. Delayed filing also raises the chance of scrutiny.

5. Claiming Fake or Unsupported Deductions

Claiming deductions without actual investments or proof, such as fake LIC receipts or forged rent agreements for HRA, may lead to scrutiny or penalty under anti-abuse provisions. The Income Tax Department may ask for documentation during assessment or scrutiny. If you fail to produce genuine proof, the deduction will be disallowed, and you may be penalized for misreporting income under Section 270A.

6. Not Opting for the Correct Tax Regime

From FY 2020–21 onwards, taxpayers can choose between the old regime (with deductions/exemptions) and the new regime (lower rates without exemptions). Taxpayers often make the mistake of choosing a regime without actually comparing the outcomes. If you opt for the new regime but have already made significant tax-saving investments, you may end up paying more tax than necessary.

7. Ignoring Form 26AS, AIS & TIS

Form 26AS, the Annual Information Statement (AIS), and the Taxpayer Information Summary (TIS) summarize your reported income, tax deducted at source (TDS), and other financial transactions. Mismatches between these and your ITR can trigger tax notices.

For example, if your Form 26AS shows an FD interest of ₹50,000 and you don’t report it, the department will raise a red flag. Always reconcile your returns with these documents before filing.

8. Not E-Verifying the ITR, Nor Send Hard copy of ITR V to IT department

Filing your ITR is incomplete without e-verification. If you do not verify your return within 30 days, it will be treated as not filed, even if you submitted it. This means you’ll have to redo the entire process, and if the deadline has passed, you may lose the opportunity to file altogether or incur a late filing fee. E-verification can be done quickly using Aadhaar OTP, Net Banking, or a Digital Signature Certificate (DSC). In case you are not able to E verify then send ITR V acknowledgment to Address given on it.

9. Mismatch of Turnover in GST and ITR

 

 

For business owners, discrepancies between turnover declared in GST returns (GSTR-1, GSTR-3B) and ITR can invite scrutiny. Suppose you show a turnover of ₹60 lakh in GST but only ₹40 lakh in ITR—the mismatch may prompt both income tax and GST authorities to initiate audits or send notices. Proper reconciliation between books, GST returns, and ITR is critical to avoid compliance issues.

10. Not Validating Bank Accounts

Income tax refunds are only processed to pre-validated bank accounts. If the account where you expect the refund is not validated on the e-filing portal, the refund will fail, and you’ll need to re-initiate the validation and refund process, leading to delays. Always check the status of your bank accounts under the “Profile” section on the portal before filing.

11. Not Reporting Losses Properly

Losses such as short-term capital loss, long-term capital loss, or house property loss must be reported accurately and within the due date to be eligible for carry forward. If you miss the deadline or fail to disclose them in the correct schedule, you lose the ability to offset them against future profits, resulting in higher tax outgo in subsequent years.

12. Non-Reporting of Crypto Transactions

Profits from trading in cryptocurrencies are taxed at a flat 30% under the new regime, with no deductions allowed other than the cost of acquisition. Since exchanges are now required to deduct TDS under Section 194S, the ITD tracks these transactions closely. Failing to report crypto gains or airdrops can lead to serious compliance issues and hefty penalties.

13. Ignoring Forms Like 10E, 10IE, 10-IEA

Certain claims, like relief for salary arrears or opting for the new tax regime, require filing specific forms—Form 10E and Form 10IE/10-IEA respectively. If you forget to file these forms, your relief claim or regime selection may be rejected even if correctly mentioned in your ITR, which can significantly increase your tax liability.

 

 

14. Non-Reporting of Interest Income

Interest from savings accounts, fixed deposits (FDs), and recurring deposits (RDs) is fully taxable, but many individuals forget to include this under “Income from Other Sources.” Banks report interest income to the ITD, and omission can result in mismatch notices. Always collect your annual interest summary from the bank or refer to Form 26AS and AIS before filing.

15. Choosing Pay Now Instead of Pay Later Option

When using the Income Tax portal for return filing, choosing the “Pay Now” option before calculating the final tax liability can lead to incorrect payments—either excess or shortfall. It is always advisable to finalize the ITR computation first, then pay self-assessment tax (if any) based on accurate figures, and finally submit the return.

16. Hiring Unqualified or Cheap Consultants

Filing through inexperienced agents, especially during tax season, may save money in the short term but can lead to costly errors like using the wrong ITR form or claiming ineligible deductions. Errors by unqualified preparers often result in tax notices, penalties, or blocked refunds. It is always safer to engage qualified professionals such as Chartered Accountants.

 

17. Ignoring Section 139 (6th & 7th Proviso)

Even if your income is below the taxable limit, you must file ITR if you meet certain financial thresholds—such as depositing over ₹1 crore in a bank account, spending over ₹2 lakh on foreign travel, or paying more than ₹1 lakh in electricity bills, Deposited 50 Lakh or more in Saving Bank account, you have Business Turnover more than 60 Lakh or Professional receipts more than 10 Lakh, TDS deducted is more Than Rs.25000 (Rs.50000 in case of senior citizens), Beneficiary or Signatory in foreign assets or bank accounts etc. Failing to file in these cases may be treated as non-compliance and can attract penalties.

18. Not Maintaining Books of Accounts

Freelancers, consultants, and small business owners are often unaware that they are required to maintain books of accounts under Rule 6F. This includes ledgers, cash books, invoices, and expense vouchers. Not maintaining proper records can lead to disallowance of expenses, estimation of income by the Assessing Officer, and higher tax liability.

19. Ignoring ITR Intimation (Section 143(1))

After processing your ITR, the Income Tax Department issues an intimation under Section 143(1), stating whether your return has been accepted as-is or adjusted. Many people ignore this, missing crucial updates like additional tax demand, refund amount mismatch, or disallowed deductions. Always download and review this document from your e-filing dashboard.

20. Not Reviewing Filed Return Carefully

Even when returns are prepared by professionals, you must review the ITR before submission. Mistakes in PAN, bank account numbers, income entries, or deduction claims can lead to refund failure or tax notices. Review the draft return PDF or XML file to ensure accuracy before final submission.

21. Not Maintaining Documentation

All documents used for ITR filing—such as Form 16, rent receipts, investment proofs, donation receipts, bank statements, and loan certificates—must be kept for at least 8 years. These may be required during assessments, refunds, or scrutiny. The ITR-V acknowledgment, in particular, is essential proof of filing.

22. Not Paying Advance Tax or Self-Assessment Tax

If your total tax liability (after TDS) exceeds ₹10,000, you are required to pay advance tax in four instalments. Failing to do so results in interest under Sections 234B and 234C. Many salaried individuals with additional income (like rent or interest) miss this, leading to interest penalties.

23. Not Linking PAN with Aadhaar

The Income Tax Department has made it mandatory to link PAN with Aadhaar. A PAN not linked becomes inoperative, and returns filed using it are considered invalid. Refunds will not be processed, and you cannot file new returns. Linking must be done on the e-filing portal before the prescribed deadline.

24. Not Reporting Income from Multiple Employers

If you switched jobs during the financial year, it’s important to report income from all employers. Failing to include income from your previous employer leads to under-reporting, higher tax liability, and possible notices. Combine all Form 16s while filing your return.

25. Not Checking All Bank Accounts

Refunds and other communications often depend on the correct bank details being provided. If you haven’t reviewed your list of bank accounts on the e-filing portal, and your primary account is not pre-validated, refunds may fail. Validate all active accounts and designate the correct one for refunds.

26. Not Reporting Exempt Income

Many taxpayers ignore exempt incomes such as interest from PPF, maturity of life insurance, or agricultural income. While these are not taxable, they must be disclosed in the ITR for transparency. Non-disclosure may raise red flags during processing or scrutiny.

27. Deemed to be Let-Out Property Not Shown

If you own more than one house, only two can be treated as self-occupied; the rest are deemed to be let out—even if not actually rented—and not showing them leads to incorrect income computation. Notional rent must be offered to tax on such properties.

28. Forgetting to Disclose Foreign Assets

If you are a resident and own foreign bank accounts, shares, or properties, these must be disclosed in your ITR. Non-disclosure, even unintentionally, can lead to penalties under the Black Money Act. This disclosure is mandatory even if the assets don’t generate income.