ITR Filing AY 2025-26: Step-by-Step Guide with Tax Regime Comparison

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by

Himanshu
in ,

Let’s understand Income Tax Return (ITR) Filing for Assessment Year (AY) 2025-26 (FY 2024-25) in detail with examples for salaried individuals at different income levels: ₹5L, ₹10L, ₹12L, ₹16L, and ₹20L.

✅ Basic Concepts:

🔸 AY 2025-26 = Financial Year 2024-25

Income earned from 1st April 2024 to 31st March 2025 is filed as ITR in AY 2025-26.

🔸 Income Tax Regimes

There are two regimes:

  1. Old Tax Regime – You can claim deductions like:
    • Standard Deduction (₹50,000)
    • HRA
    • 80C (₹1.5L for LIC, PPF, PF, etc.)
    • 80D (Medical Insurance)
    • 24(b) (Home Loan Interest)
    • LTA, etc.
  2. New Tax Regime (default from FY 2023-24)
    • Lower tax rates
    • Fewer deductions allowed
    • ₹50,000 standard deduction allowed from FY 2023-24 onwards.

🧾 Tax Slabs (FY 2024-25):

🔹 New Regime (Default):

Income RangeTax Rate
Up to ₹3,00,000Nil
₹3,00,001 – ₹6,00,0005%
₹6,00,001 – ₹9,00,00010%
₹9,00,001 – ₹12,00,00015%
₹12,00,001 – ₹15,00,00020%
Above ₹15,00,00030%
  • Rebate under Section 87A up to income of ₹7L ⇒ No tax (after rebate).
  • Standard deduction of ₹50,000 is available.

🔹 Old Regime:

Income RangeTax Rate
Up to ₹2,50,000Nil
₹2,50,001 – ₹5,00,0005%
₹5,00,001 – ₹10,00,00020%
Above ₹10,00,00030%
  • Full deductions allowed.
  • Rebate under Section 87A available if income ≤ ₹5L ⇒ Zero tax.

📊 Examples: Salaried Individuals

👤 1. Salary = ₹5,00,000

📌 Old Regime:

  • Gross Income: ₹5,00,000
  • Less: Standard Deduction = ₹50,000
  • Net Taxable: ₹4,50,000
  • Tax before rebate = 5% of ₹2,00,000 = ₹10,000
  • 87A rebate = ₹10,000 ⇒ Tax = ₹0

✅ Best regime: Old Regime (same as new in this case)

👤 2. Salary = ₹10,00,000

A) 📌 New Regime

  • Salary = ₹10,00,000
  • Less Standard Deduction = ₹50,000
  • Taxable = ₹9,50,000

Tax Calculation:

SlabTax
0–3L₹0
3–6L (3L) @ 5%₹15,000
6–9L (3L) @ 10%₹30,000
9–9.5L (0.5L) @ 15%₹7,500
Total₹52,500
Add 4% Cess₹2,100
Total Tax = ₹54,600

B) 📌 Old Regime

Assuming:

  • 80C = ₹1.5L (PF, LIC, ELSS)
  • 80D = ₹25,000 (Health Insurance)
  • HRA/Other = ₹25,000
  • Std Deduction = ₹50,000
    Total Deductions = ₹2.5L
  • Gross: ₹10L
  • Taxable = ₹7.5L

Tax Calculation:

  • Up to ₹2.5L = Nil
  • ₹2.5L – ₹5L = 5% = ₹12,500
  • ₹5L – ₹7.5L = 20% = ₹50,000
  • Total = ₹62,500 + 4% cess = ₹65,000

👉 New Regime wins (₹54,600 < ₹65,000)

👤 3. Salary = ₹12,00,000

A) 📌 New Regime

  • Salary = ₹12L
  • Std Deduction = ₹50K
  • Taxable = ₹11.5L

Tax Calculation:

SlabTax
0–3L₹0
3–6L @5%₹15,000
6–9L @10%₹30,000
9–11.5L @15%₹37,500
Total₹82,500
+4% Cess₹3,300
Total Tax = ₹85,800

B) 📌 Old Regime

Assuming:

  • 80C = ₹1.5L
  • 80D = ₹25,000
  • HRA & Others = ₹25,000
  • Std Deduction = ₹50K
    Total deductions = ₹2.5L

Taxable = ₹9.5L

Tax:

  • Up to ₹2.5L = 0
  • ₹2.5L–5L = ₹12,500
  • ₹5L–10L = ₹90,000
    Total = ₹1,02,500 + 4% = ₹1,06,600

✅ New Regime wins again.

👤 4. Salary = ₹16,00,000

A) 📌 New Regime

  • Salary = ₹16L – 50K = ₹15.5L
SlabTax
0–3L₹0
3–6L @5%₹15,000
6–9L @10%₹30,000
9–12L @15%₹45,000
12–15L @20%₹60,000
15–15.5L @30%₹15,000
Total = ₹1,65,000 + 4% = ₹1,71,600

B) 📌 Old Regime (with full deductions = ₹2.5L)

Taxable = ₹13.5L

Tax:

  • Up to 2.5L = 0
  • 2.5L–5L = ₹12,500
  • 5L–10L = ₹1L
  • 10L–13.5L = ₹1.05L
    Total = ₹2.17L + 4% = ₹2,25,680

✅ New Regime wins again.

👤 5. Salary = ₹20,00,000

A) 📌 New Regime

  • Salary = ₹20L – 50K = ₹19.5L

Tax Calculation:

  • 0–3L = 0
  • 3–6L = 15K
  • 6–9L = 30K
  • 9–12L = 45K
  • 12–15L = 60K
  • 15–19.5L = 30% of 4.5L = ₹1.35L
    Total = ₹3L
    Cess = ₹12,000
    Total = ₹3,12,000

B) 📌 Old Regime

Taxable = ₹17.5L (after deductions)

  • 2.5–5L = ₹12.5K
  • 5–10L = ₹1L
  • 10–17.5L = ₹2.25L
    = ₹3.375L
  • 4% = ₹3,50,000 approx

✅ New Regime better again

✅ Summary Table: New vs Old Tax

SalaryOld Regime (with ₹2.5L deductions)New Regime (₹50k std. ded.)Winner
₹5L₹0₹0Same
₹10L₹65,000₹54,600New Regime
₹12L₹1,06,600₹85,800New Regime
₹16L₹2,25,680₹1,71,600New Regime
₹20L₹3,50,000₹3,12,000New Regime

📝 Tips to Save Tax Under Old Regime

  1. Invest ₹1.5L under 80C – PPF, ELSS, PF, LIC, etc.
  2. Buy Health Insurance – Save under 80D.
  3. Home Loan – Claim interest under 24(b) and principal under 80C.
  4. NPS Contribution – ₹50K extra under 80CCD(1B).
  5. Leave Travel Allowance, HRA exemption.

🧠 Final Advice:

SituationRecommended Regime
No major investmentsNew Regime
Have loans, insurance, PF, ELSS, etc.Old Regime
Income under ₹7L (new regime)New Regime (zero tax)

You can compare both regimes while filing ITR – use the income tax calculator on the Income Tax e-filing Portal or consult a CA for optimization.

ITR filing process for AY 2025–26

Let’s recreate the full step-by-step ITR filing process for AY 2025–26 (FY 2024–25) for a salaried person earning ₹14,00,000 — this time comparing both Old and New Tax Regimes side-by-side — so you can clearly decide which one to choose while filing.

🧑‍💼 Example Profile – Ravi Kumar

ParticularDetails
NameRavi Kumar
Age35 (Non-senior)
Annual Salary₹14,00,000
Deductions (Old Regime)80C = ₹1.5L, 80D = ₹25K, Std Ded = ₹50K (Total = ₹2.25L)
Deductions (New Regime)Only Std Deduction = ₹50,000 (limited)

⚖️ Tax Comparison: Old Regime vs New Regime

🔹 Old Regime Calculation

ParticularAmount
Gross Salary₹14,00,000
Less: Standard Deduction₹50,000
Less: 80C (LIC/PF/ELSS)₹1,50,000
Less: 80D (Health Insurance)₹25,000
Taxable Income₹11,75,000

Tax Computation:

  • ₹2.5L – ₹5L @ 5% = ₹12,500
  • ₹5L – ₹10L @ 20% = ₹1,00,000
  • ₹10L – ₹11.75L @ 30% = ₹52,500
    Total = ₹1,65,000
  • 4% Cess = ₹6,600
    ✅ Total Tax = ₹1,71,600

🔹 New Regime Calculation

ParticularAmount
Gross Salary₹14,00,000
Less: Standard Deduction₹50,000
Taxable Income₹13,50,000

Tax Computation:

  • ₹0 – ₹3L = Nil
  • ₹3L – ₹6L @ 5% = ₹15,000
  • ₹6L – ₹9L @ 10% = ₹30,000
  • ₹9L – ₹12L @ 15% = ₹45,000
  • ₹12L – ₹13.5L @ 20% = ₹30,000
    Total = ₹1,20,000
  • 4% Cess = ₹4,800
    ✅ Total Tax = ₹1,24,800

💡 Which Regime is Better?

RegimeTotal Tax Payable
Old₹1,71,600
New₹1,24,800 ✅

🟢 New Regime saves ₹46,800 in this case.

🧾 Step-by-Step: ITR Filing for ₹14L Salary (with regime selection)

🔷 Step 1: Visit the Income Tax Portal

👉 https://www.incometax.gov.in

🔷 Step 2: Login

  • Use your PAN as User ID
  • OTP verification via mobile/email
  • Dashboard shows your PAN and quick actions

🔷 Step 3: Click e-File > Income Tax Return > File ITR

🔷 Step 4: Select Details

OptionSelection
Assessment Year2025–26
Mode of FilingOnline
StatusIndividual
ITR FormITR-1 (Sahaj)

🔷 Step 5: Choose Tax Regime

✅ Portal will ask: “Choose Tax Regime”
You can:

  • Choose New Regime if you don’t want to claim deductions
  • Choose Old Regime if you have PF, LIC, etc.

Tip: Compare tax computation shown in preview to decide.

🔷 Step 6: Income Details – Auto-Filled from Form 16

Check:

  • Employer Name, PAN, TAN
  • Gross Salary
  • TDS deducted

If not auto-filled, use Form 16 manually.

🔷 Step 7: Enter Deductions (if Old Regime is selected)

Fill:

  • 80C (LIC, PF) = ₹1,50,000
  • 80D = ₹25,000
  • Standard Deduction = ₹50,000 (auto)

🔺 Skip this step if you chose New Regime — only ₹50K is auto-applied.

🔷 Step 8: Review Tax Computation

Portal will show:

  • Gross Income
  • Deductions (if any)
  • Taxable Income
  • TDS already deducted by employer
  • Tax Payable / Refund

👉 If any tax remains: Use e-Pay Tax and enter Challan No.

🔷 Step 9: Bank & Verification

  • Confirm your pre-validated bank account (for refund)
  • Choose e-Verify Now (via Aadhaar OTP, Net Banking, etc.)

🔷 Step 10: Submit and Done ✅

Your ITR is now filed.

You’ll receive:

  • Email confirmation
  • ITR-V Acknowledgment (PDF)
  • Option to download computation summary

📁 Important Notes

ItemInfo
Deadline31 July 2025
ITR Form for SalaryITR-1 (Sahaj)
Refund TimelineUsually within 10–45 days
Supporting DocumentsDon’t upload, but keep safe
Can you switch regime next year?✅ Yes, for salaried

📌 Summary – Filing ITR for ₹14L Salary

StepOld RegimeNew Regime
Deduction Used₹2.25L (80C, 80D, Std)Only ₹50K (Std Deduction)
Taxable Income₹11,75,000₹13,50,000
Tax Payable₹1,71,600₹1,24,800 ✅
Recommended❌ Not beneficial unless higher deductions✅ Better for Ravi

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