Top 10 income tax changes from 2024 to look out for while filing ITR in 2025

The year 2024 has brought in significant changes to India's personal income tax structure, with multiple reforms announced in the Union Budget 2024-25, influencing the deductions and exemptions taxpayers can claim when filing their income tax returns (ITR) in July 2025.

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List of income tax reforms in 2024

The following is a list of changes the income tax structure has seen.

1) New tax regime's different rate slabs

The new tax regime's revised slabs offer taxpayers potential annual savings of about ₹17,500. The slab rates are as follows:

Up to ₹3 lakh - Nil

₹3-7 lakh - 5%

₹7-10 lakh - 10%

₹10-12 lakh - 15%

12-15 lakh - 20%

Above ₹15 lakh - 30%

2) Standard deduction hike

The government increased the standard deduction ceiling from ₹50,000 to ₹75,000 as well as from ₹15,000 to ₹25,000 for family pensioners under the new tax regime.

3) Old tax regime's standard deduction limit

The standard deduction limit does not change if an individual opts for the old tax regime. The old tax regime's slab rates are as follows:

Up to ₹2.5 lakh - Nil

₹2.5- ₹5 lakh - 5%

₹5 lakh to ₹10 lakh - 20%

Income above ₹10 lakh - 30%

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4) Capital gains tax

Short-term capital gains tax has now increased from 15% to 20%, while long-term capital gains tax rose from 10% to 12.50% on listed shares and equity mutual funds.

The tax-exemption threshold for long-term capital gains has also now been raised from ₹1 lakh to ₹1,25,000.

5) Securities transactions tax hike

Those who trade equity derivatives (F&O) will now have to pay higher Securities Transaction Tax (STT), which for options will increase from 0.0625% to 0.1% of the premium (the same rate as delivery transactions), while for futures, will be upped from 0.0125% to 0.02% of the traded price.

6) Changes in taxation of buyback of shares

Previously, shareholders were exempt from paying tax on buyback proceeds (under Section 10(34A)), while the company had to pay a 20% tax (plus surcharge and cess) on the net buyback amount.

Now, individual shareholders will have to pay tax on buyback proceeds, similar to dividends, at their applicable income tax slab rates.

This came into effect from October 1, 2024.

7) Indexation benefit

Indexation has now been removed for all long-term capital gains. But resident Indians or a Hindu Undivided Family (HUF) are given an option of 12.5% tax without indexation and 20% tax with indexation benefits for land and property sales.

This has been a major concern for many real estate investors, especially those who had held properties for extended periods, since this change is expected to increase the tax burden.

8) TDS

The 5% TDS rate on various payments will now be merged into the 2% rate, while the 20% TDS on mutual fund/UTI unit repurchases will be withdrawn.

The TDS rate for e-commerce operators will now decrease from 1% to 0.1%.

Tax Collected at Source (TCS) will now be creditable against TDS deducted from salaries

Delays in TDS payments will now be decriminalized.

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9) New reopening assessments threshold

Assessments can now be reopened for up to five years after the end of the assessment year, but this can be done only if the escaped income exceeds ₹50 lakh.

10) Vivad se Vishwas scheme

Finance Minister Nirmala Sitharaman proposed the Vivad se Vishwas Scheme during the Union Budget 2024 in order to resolve disputes and also clear tax backlogs where taxpayers can pay the disputed tax amount along with a specified percentage of this amount to close the dispute and waive additional penalties and interest.