Budget Update 2025
No Income Tax on Annual Income Up to ₹12.75 Lakh!
The government has raised the Section 87A rebate limit from ₹7 lakh to ₹12 lakh, providing major tax relief to the middle class. Salaried individuals can also claim a ₹75,000 standard deduction, making incomes up to ₹12.75 lakh tax-free.
New Slab Structure under new tax regime:
- ₹0 – ₹4 lakh → No Tax
- ₹4 lakh – ₹8 lakh → 5%
- ₹8 lakh – ₹12 lakh → 10%
- ₹12 lakh – ₹16 lakh → 15%
- ₹16 lakh – ₹20 lakh → 20%
- ₹20 lakh – ₹24 lakh → 25%
- ₹24 lakh & above → 30%
Extended time for filing updated returns (ITR-U):
Taxpayers now get 4 years (instead of 2) to update their Income Tax Returns.
These changes will be effective from 1 April 2025 i.e. for FY 2025-26
ITR-3
ITR-3 can be used by individuals, HUFs, and Partners in a Firm. Any person having income from the following sources should use ITR-3 to file their ITR.
Eligibility Criteria for Filing ITR-3
- Income from business/profession (both tax audit and non tax audit cases)
- Salary income
- Rental income from house property
- Short or long-term capital gains
- Interest, dividends, winnings from the lottery, or any income from other sources.
- Income (interest and remuneration) as a partner in a firm.
Who Cannot File ITR-3 Form?
- Individuals and HUFs not having income from business/profession or partnership forms are not eligible to file ITR-3.
- Companies, charitable trusts, Limited Liability Partnerships (LLPs)
-
The person for whom tax audit is applicable -
- Turnover of more than Rs.2 cr. for traders and manufacturers as per section 44AD.
- Gross receipts exceeding Rs.75 lakhs for specified person as per section 44ADA.
Due date to file ITR-3 for FY 2024-25
| Category of taxpayer |
Due date of ITR |
| If tax audit is not applicable (Non-Audit cases) |
31 July 2025 |
- If tax audit is applicable
- Partner of a firm where the firm is required to get its books of accounts audited
|
31 October 2025 |
ITR-4
Who Can File ITR-4?
ITR-4 can be used by a Resident Individual / HUF / Firm (other than LLP) who has income:
- You are a resident individual, HUF, or partnership firm with a total income of up to Rs. 50 lakhs and you have opted for the presumptive taxation scheme under Section 44AD, 44ADA, or 44AE of the Income Tax Act.
- If you have income from a single proprietorship business or profession, ITR-4 is applicable to you.
- You can use ITR-4 if you have income from the following sources:
- Business or profession (presumptive income under section 44AD, 44ADA, or 44AE),
- Salary or pension
- One house property (excluding brought forward losses),
- Other sources (excluding winnings from lottery and income from horse races),
- Exempt income. However, Agriculture income only upto Rs.5000 limit
Who Cannot File ITR-4?
- Non-residents or Resident but not ordinarily resident RNOR.
- Should not have income from lottery or owning or maintaining race horses
- A person who is a director in any company
- Individuals holding unlisted equity shares at any time during the year.
- Individuals having income exceeding Rs.50 lakhs.
- Individuals with agricultural income of more than Rs.5000.
- Having income from more than one house property
- Income taxable under the section 115BBDA and 115BBE.
- Taxpayers having income tax deferred on ESOPs
- Having foreign income or assets
- Individuals claiming relief u/s 90 or DTAA.
*Section 44AD - Under this section, taxpayers having upto Rs 2 crore of turnover are not required to maintain books of accounts and declare 8% or 6%(in case of online transactions) of their turnover as profits. This scheme benefits small taxpayers who get relieved from maintaining the books of accounts and get them audited.
**Section 44ADA - Under this section, profits from certain professions are presumed at 50% of the gross receipts. Section 44ADA will apply to the following professions only if their gross receipts are up to Rs 50 lakh in a financial year. This limit was revised in the Budget 2023. So the new limit is Rs.75 lakhs -
- Interior decorations
- Technical consulting
- Engineering
- Accounting
- Legal
- Medical
- Architecture
- Other professionals, as mentioned below:
Movie artists include a editors, actors, directors, music directors, art directors, dance directors, cameramen, singers, lyricist, story writer, screenplay or dialogue writer and costume designers
Authorised representative means a person representing another person for a fee before a tribunal or any authority constituted under any law. It does not include an employee of the person so represented or a person who is carrying on the profession of accountancy or
any other notified professionals.
***Section 44AE - This section applies to the taxpayers engaged in the business of plying, hiring, or leasing goods carriages and does not own more than 10 goods vehicles at any time during the financial year (Declare their income in the scheme at Rs 7500 per vehicle per month). Taxpayers can learn about the method of income computation from here.
Examples
- Akshay runs a cloth retail shop and has opted for the Presumptive Taxation Scheme.
In this case, Akshay can choose to file either ITR 3 or ITR 4 (if his gross turnover is less than Rs.2 crore.
- Neha is an interior designer and doesn’t know which ITR form to file.
As a professional, if her gross receipts are less than Rs.50 lakhs, she can choose the presumptive income scheme and file ITR 4.
Now that you know the difference between ITR 3 and ITR 4, you must have figured out which ITR Form to file. If you are still confused about which ITR form to choose, you don’t have to worry. Our AI-integrated DIY ITR filing portal is smart enough to choose the appropriate ITR form automatically and even pre-fill most of your data to make your ITR filing journey smooth. You can also take assistance from qualified and experienced CAs through our eCA service.
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