ITR Filing 2025 Deadline Extended, Know Which Tax Regime Works Best For You

New Delhi: The government has extended the Income Tax Return (ITR) filing deadline to September 15, 2025. This gives taxpayers more time to choose between the old and new tax regimes, depending on what suits them best.

If you are a salaried employee or pensioner without business income, you can switch between regimes every year just by selecting the correct option while filing ITR-1 or ITR-2.

However, if you have business or professional income, the rule is stricter. You can switch back to the old regime only once in your lifetime. After that, the choice becomes permanent. You must also submit Form 10-IEA before the due date, or else you'll automatically fall under the new regime.

Key Differences: Deductions and Exemptions

The old tax regime allows many tax benefits and deductions such as:

- House Rent Allowance (HRA)

- Leave Travel Allowance (LTA)

- Section 80C to 80U deductions (includes investments like PPF, ELSS, life insurance)

- Home loan interest under Section 24(b)

On the other hand, the new tax regime has fewer deductions. It mostly offers benefits under:

- Section 80CCD(2) – employer's contribution to NPS

- Section 80CCH(2) – for Agniveer corpus fund

New Tax Regime Slabs Explained

In the new tax regime, the tax slabs are simpler:

- 0 percent tax on income up to Rs 4 lakh

- 5 percent on Rs 4 to Rs 8 lakh

- 10 percent on Rs 8 to Rs 12 lakh

- 15 percent on Rs 12 to Rs 16 lakh, and so on

If your taxable income is up to Rs 12 lakh, you could get a full tax rebate under the new regime, meaning you pay no tax at all.

Which Regime Should You Choose?

Your choice depends on your income, salary structure, and investments.

Choose the new regime if:

- You have few or no deductions

- Your salary is simple without many allowances

Your taxable income is below Rs 12 lakh

Stick with the old regime if:

- You claim big deductions under Section 80C, 80D

- You get high HRA or home loan interest benefit

- You want to carry forward losses (from house property, business, or capital gains)

Remember, under the new regime, you cannot carry forward these losses, which may impact your tax later.

Tax experts say that unless you have at least Rs 2 lakh in deductions, mostly from home loan interest or HRA, the new regime is usually better for most taxpayers.