Income Tax Return 2025: What’s New in the ITR-2 Filing Process for AY 2025-26

ITR-2

Income Tax Return 2025: What’s New in the ITR-2 Filing Process for AY 2025-26

ITR-2

As the new financial year kicks off, it also marks the beginning of the much-anticipated tax filing season for Assessment Year (AY) 2025-26, covering income earned during Financial Year (FY) 2024-25. The Income Tax Department has made a few notable updates this year, particularly with the ITR-2 form, which is crucial for a certain category of taxpayers.

Key Update: New Excel Utility for ITR-2

A significant change this season is the release of a new Excel-based utility for ITR-2, launched on March 25, 2025. This updated version includes enhanced features, one of which is the ability to file revised returns under Section 139(8A)—a move aimed at improving filing flexibility and compliance.

Who Should File ITR-2?

ITR-2 is specifically meant for individuals and Hindu Undivided Families (HUFs) who do not have income from business or profession. You should opt for this form if you:

  • Have total income exceeding ₹50 lakh

  • Earn income from multiple house properties

  • Have capital gains (long-term or short-term)

  • Are a director in a company

  • Hold shares in an unlisted company

  • Possess foreign assets or earn foreign income

If your income is solely from salary, pension, interest, dividends, or rent from a single property and is less than ₹50 lakh, you may be eligible to file using ITR-1 instead.

Revised Return Under Section 139(8A)

One of the key introductions this year is the facility to file a revised return under Section 139(8A) directly using the ITR-2 Excel utility. This provision helps taxpayers correct or update their returns with greater ease, ensuring better accuracy and compliance.

Choosing the Right ITR Form Matters

Your ITR form selection depends on two main factors:

  1. Total income

  2. Nature/source of income

Filing the correct form not only simplifies the process but also ensures that your return is processed smoothly without unnecessary notices or rejections from the Income Tax Department.

Read More: GST Amendments 2025: Impact and Implications from April 1

With the release of the updated ITR-2 utility and new provisions like Section 139(8A), the tax filing process for AY 2025-26 has become more structured and taxpayer-friendly. Ensure that you assess your income sources and choose the appropriate form for a seamless and compliant return filing experience.

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GST Amendments 2025: Impact and Implications from April 1

GST Amendments

GST Amendments 2025: Impact and Implications from April 1

GST Amendments

As the Goods and Services Tax (GST) regime approaches its eighth anniversary since its launch on July 1, 2017, the framework continues to evolve in response to compliance needs, technological advancements, and stakeholder feedback. The latest amendments coming into effect from April 1, 2025, mark a significant milestone in this journey—bringing major procedural and operational reforms that impact taxpayers, businesses, and tax professionals alike.

These reforms are aimed at enhancing compliance, tightening security, simplifying tax administration, and fostering accountability across all levels. Let’s explore eight major GST amendments that come into force this financial year and examine their legal basis, practical implications, and anticipated benefits.

Mandatory Multi-Factor Authentication (MFA) for All Taxpayers

To strengthen data security and prevent unauthorized access, MFA is now compulsory for all users accessing the GST portal, effective April 1, 2025. Earlier implemented in phases for larger taxpayers, this security feature is now applicable to everyone.

Legal Basis: Section 146 of the CGST Act, 2017

Authentication Methods: Password + OTP via SMS, Sandes App, or NIC-GST-Shield App

Rollout Timeline:

  • ₹20 Cr+ turnover: From Jan 1, 2025

  • ₹5 Cr+ turnover: From Feb 1, 2025

  • All others: From April 1, 2025

Benefits:

  • Enhanced data protection

  • Fraud prevention

  • Improved user accountability

  • Global cybersecurity alignment

  • Greater trust in the digital tax system

Upgraded E-Way Bill & E-Invoice Systems with Validity Restrictions

To ensure timeliness and transparency in goods movement, E-Way Bills can now only be generated for invoices issued within the last 180 days, with an overall cap of 360 days. Enhanced E-Way Bill and e-Invoice platforms will also include mandatory 2FA authentication.

Legal Basis: Section 68 of the CGST Act, 2017

Key Change: Restriction on backdated invoices and phased implementation of 2FA for all users

Implications:

  • Stronger checks against fake invoicing

  • More efficient monitoring and analytics

  • Discourages prolonged warehousing of goods

  • Environmentally sustainable operations

Sequential Filing Now Mandatory for GSTR-7 (TDS Returns)

Starting Nov 1, 2024, Tax Deductors must file GSTR-7 returns in chronological order without skipping periods. Even Nil returns must be filed to maintain sequence.

Legal Basis: Section 51, Rule 66, Notification No. 17/2024

Targeted Entities: Government departments, PSUs, corporations deducting TDS under GST

Advantages:

  • Improved TDS tracking and reconciliation

  • Smoother audits with uninterrupted data trails

  • Minimization of return filing inconsistencies

Biometric Authentication for Directors of Companies

To curb fraudulent registrations, company directors must complete biometric authentication at any GST Suvidha Kendra in their home state.

Legal Basis: Section 25; Rule 8 & 9 (Amended via Notification No. 20/2025)

Available From: March 4, 2025

Scope of Authentication:

  • Fingerprints, facial recognition, photo, and document verification

Key Benefits:

  • Prevention of fake registrations

  • Enhanced identity verification

  • Easier registration process across states

  • Aligns GST KYC with banking norms

Mandatory Input Service Distributor (ISD) Mechanism

From April 1, 2025, the ISD mechanism is mandatory for allocating ITC on shared services like rent, advertising, and professional fees across multiple GST registrations under a single PAN.

Legal Basis: Section 20; Rule 39 & 54 (Notification No. 21/2025)

Services Covered: FCM & RCM-based common input services

Expected Outcomes:

  • Equitable and accurate ITC distribution

  • Consistent practices across organizations

  • Reduced working capital needs

  • Better transparency and audit readiness

GST Rate Changes for Hotels and Used Cars

For Hotels:

  • Declared Tariff abolished; tax based on actual transaction value

  • 18% GST for room tariffs above ₹7,500/day

  • Full Input Tax Credit (ITC) eligibility

For Used Cars:

  • Uniform GST rate of 18% on margin value for all categories

  • Differential rates (12% for small cars, EVs) eliminated

Legal Basis: Rule 32(5) of CGST Rules, 2017

Positive Impacts:

  • Simplified valuation and compliance for hotels

  • Level playing field for the used car industry

  • Increased transparency and fair tax practices

  • Enhanced revenue collection for the government

New Invoice Series Requirement

  • Effective April 1, 2025, all taxpayers must initiate a new invoice series for the financial year. The series must be unique, sequential, and non-repetitive.

    Key Guidelines:

    • Separate series for different types (invoice, credit note, etc.)

    • ERP systems must be updated accordingly

    • Applicable to all e-invoicing eligible taxpayers (AATO > ₹5 Cr)

    Purpose:

    • Improve auditability

    • Standardize invoicing processes

    • Prevent duplication and discrepancies

GST Amendments

GST Waiver Scheme 2024 – Relief for Legacy Dues

A one-time GST Amnesty Scheme provides a waiver of interest and penalty for FY 2017–18 to 2019–20, subject to 100% payment of tax dues by March 31, 2025.

Legal Basis: Section 128A of the CGST Act, 2017

Application Forms: SPL-01 / SPL-02

Deadline: Apply by June 30, 2025

Why It Matters:

    • Enables resolution of long-standing disputes

    • Encourages voluntary compliance

    • Reduces financial and litigation burden for honest taxpayers

Read More: Impact of New Income Tax Slabs and TDS Thresholds Effective April 1, 2025

Strengthening Compliance While Easing Operations

The GST amendments effective April 1, 2025, signal a balanced approach by the government—tightening security and enforcement on one hand while simplifying procedures and offering relief on the other. While these reforms will demand greater diligence from taxpayers, they also enhance trust, transparency, and efficiency in the overall tax ecosystem.

For businesses, professionals, and tax administrators alike, adapting early and updating internal systems will be key to smooth compliance. These timely changes are a testament to India’s commitment to evolving GST into a more mature, resilient, and globally aligned tax regime.

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Impact of New Income Tax Slabs and TDS Thresholds Effective April 1, 2025

tax slabs

Impact of New Income Tax Slabs and TDS Thresholds Effective April 1, 2025

tax slabs

Starting April 1, 2025, significant changes in income tax slabs under the new regime and TDS deduction thresholds have been introduced. These revisions will impact all taxpayers, offering relief in certain areas while adjusting tax liabilities in others. Here’s a detailed look at the updates:

Higher TDS Deduction Limits

The government has raised TDS thresholds for both senior and non-senior citizens, reducing the instances where TDS is deducted at source. Here are the updated limits:

1. Interest Income

  • Senior Citizens: TDS exemption limit increased from ₹50,000 to ₹1 lakh per year.

  • Non-Senior Citizens: Threshold raised from ₹40,000 to ₹50,000 per year.

tax slabs

2. Rental Income

The TDS threshold for rental income has been significantly increased from ₹2.4 lakh to ₹6 lakh per year (equivalent to ₹50,000 per month). This benefits landlords across all taxpayer categories.

3. Dividend Income

  • The TDS threshold on dividend income from mutual funds (under Section 194K) has been increased from ₹5,000 to ₹10,000 annually.

For incomes exceeding these thresholds, TDS will be deducted at a rate of 10%. However, taxpayers should note that these thresholds only apply to TDS deductions—total tax liability is determined based on overall taxable income.

Revised Income Tax Slabs for FY 2025-26

The new tax regime has been adjusted to provide relief to middle-income taxpayers. Below is a comparison of the old and new tax rates:

Income RangeOld Tax RateIncome RangeNew Tax Rate
Up to Rs 3 lakh0%Up to Rs 4 lakh0%
Rs 3 lakh – Rs 7 lakh5%Rs 4 lakh – Rs 8 lakh5%
Rs 7 lakh – Rs 10 lakh10%Rs 8 lakh – Rs 12 lakh10%
Rs 10 lakh – Rs 12 lakh15%Rs 12 lakh – Rs 16 lakh15%
Rs 12 lakh – Rs 15 lakh20%Rs 16 lakh – Rs 20 lakh20%
Above Rs 15 lakh30%Rs 20 lakh – Rs 24 lakh25%
  Above Rs 24 lakh30%

Additionally, a standard deduction of Rs 75,000 applies to salaried taxpayers, providing further tax relief.

Tax Rebate Under Section 87A

Under the revised tax structure, individuals with total taxable income up to Rs 12 lakh can claim a rebate under Section 87A, effectively reducing their tax liability to zero. However, this rebate does not apply to income taxed at special rates, such as capital gains from stocks and equity mutual funds. If your income includes such gains, you may still be liable to pay taxes on that portion.

Read More: Why GST Registration is Essential for Indian Startups

The updated income tax slabs and TDS thresholds aim to provide tax relief and simplify compliance for taxpayers. With increased exemption limits and rebates, individuals earning up to Rs 12 lakh can enjoy significant savings, while higher-income earners will benefit from adjusted tax brackets. To ensure optimal tax planning, taxpayers should review these changes and consider consulting a tax professional for tailored advice.

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