The deadline for filing Income Tax Returns (ITRs) for the financial year 2024-25 has been extended by 45 days, offering relief to millions of taxpayers across India. This extension is expected to ease the pressure on individuals and businesses who require additional time to gather necessary documents, reconcile accounts, and ensure accurate filing. The move comes amid growing demands from professionals and trade associations seeking more time for compliance due to workload and system challenges.
Taxpayers now have the added advantage of carefully analyzing which tax regime—old or new—will be more beneficial for them before submitting their returns. The old regime allows for multiple deductions and exemptions under various sections of the Income Tax Act, such as deductions for investments, insurance premiums, home loan interest, and medical expenses. However, it comes with higher tax rates compared to the new regime.
The new regime, introduced to simplify taxation, offers lower slab rates but removes most deductions and exemptions. It is designed for individuals who do not have significant investments or eligible deductions and prefer a straightforward tax structure. This makes the decision between the two regimes highly dependent on personal financial circumstances.
Financial experts suggest that taxpayers should first calculate their gross income and then estimate the taxable income under both regimes. For the old regime, they should include all possible deductions like Section 80C investments, 80D medical insurance, home loan benefits, and House Rent Allowance exemptions. Under the new regime, they can directly apply the reduced tax rates to their total income without these deductions.
With the additional 45 days now available, taxpayers can also seek professional guidance from chartered accountants or use government-approved e-filing portals and calculators to make accurate comparisons. Filing accurate returns not only ensures compliance but also helps avoid penalties, interest charges, and unnecessary scrutiny from the tax department.
The Central Board of Direct Taxes (CBDT) has urged taxpayers not to wait until the last few days of the extended deadline, as heavy traffic on e-filing platforms can cause delays. Timely filing also ensures quicker processing of refunds, which can be particularly beneficial for those expecting significant amounts.
This extension also benefits small businesses and freelancers, who often face complex filing requirements due to multiple income sources and expense claims. With the extra time, they can ensure proper documentation and record-keeping, reducing the risk of errors.
Overall, the extension of the ITR filing deadline is a welcome step that provides taxpayers with the breathing space needed to make informed financial decisions. By using this time effectively, individuals can select the tax regime that minimizes their liability and aligns with their long-term financial goals, ensuring compliance and maximizing savings for the year ahead.
