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Maximize Your Tax Savings with the Latest ITR Returns for FY 2025-26

Tax season can be stressful, but with the right strategies, you can make the most of your tax deductions and reduce your tax liability. Here's everything you need to know about the latest ITR returns and tax-saving methods to save more money in the financial year 2025-26.

1️⃣ Key Updates in ITR Forms for FY 2025-26

The government has introduced updated ITR forms for FY 2025-26, which include improvements to the process for both individuals and businesses. Here are the key highlights:

  • ITR 1 (Sahaj): Simplified for individuals earning up to ₹50 lakh from salary, pension, and other sources. No need to declare capital gains or business income.

  • ITR 2: For those with income from more than one house property, capital gains, or foreign income. It’s ideal for salaried individuals with multiple income sources.

  • ITR 3: For individuals and HUFs with business or profession income.

  • ITR 4 (Sugam): Simplified for small businesses or professionals opting for the presumptive taxation scheme.

  • ITR 5 & 6: For partnerships, LLPs, and companies.

  • ITR 7: For individuals or entities claiming income under various sections (like charitable organizations).

🔹 Tip: Choose the right ITR form based on your income sources to avoid complications during filing.

2️⃣ Tax-Saving Strategies for 2025-26

The Budget 2025 brought in several tax-saving options that can help you reduce your taxable income. Here’s a breakdown of the top tax-saving instruments you should consider for the current financial year:

2.1 Section 80C: The Classic Tax-Saving Tool

Under Section 80C, you can claim deductions up to ₹1.5 lakh by investing in various options like:

  • Public Provident Fund (PPF)
  • Employee Provident Fund (EPF)
  • National Savings Certificates (NSC)
  • Tax-saving Fixed Deposits (FDs)
  • National Pension System (NPS)

2.2 Section 80D: Health Insurance Premiums

If you’re paying premiums for health insurance, you can claim deductions under Section 80D. The new budget increased the rebate for senior citizens and families.

  • Up to ₹25,000 for premiums paid for self, spouse, children, and parents.
  • Up to ₹50,000 for senior citizens.

2.3 Section 80E: Education Loan

If you’ve taken an education loan, you can claim tax deductions on the interest paid under Section 80E. There’s no upper limit on the amount, and the deduction is available for up to 8 years.

2.4 Section 24(b): Home Loan Interest

You can claim a deduction of up to ₹2 lakh on the interest paid on home loans under Section 24(b). Additionally, you can claim tax relief under Section 80EEA if you bought a house for the first time.

2.5 Section 80G: Donations to Charitable Causes

Donating to recognized charities is another way to save taxes. Section 80G allows deductions for donations to approved charitable institutions.

3️⃣ New Tax Regime vs. Old Tax Regime: Which One to Choose?

With the new tax regime introduced in Budget 2020 and further tweaks in Budget 2025, many taxpayers are uncertain about which tax regime to opt for:

  • New Tax Regime: No deductions, but lower tax rates. This is simpler and suitable for those who don’t want to go through complex tax-saving schemes.
  • Old Tax Regime: You can claim deductions and exemptions, but tax rates are higher. If you invest in tax-saving instruments, this regime may still benefit you.

🔹 Tip: Calculate your tax liability under both regimes and choose the one that benefits you the most.

4️⃣ Optimize Your ITR Filing to Avoid Penalties

Filing your ITR on time is crucial to avoid penalties and interest. Here are some tips:

  • File Before the Deadline: The last date for filing is usually 31st July for individuals. Filing late can incur penalties under Section 234F.

  • Double-Check Your Income & Deductions: Ensure that you report all sources of income and claim only those deductions you are eligible for.

  • Keep Documents Ready: Maintain records of your income, investment proofs, and tax payments to simplify the filing process.

Conclusion

Maximizing your tax savings is about understanding the latest ITR forms, choosing the right tax-saving instruments, and filing on time. With Budget 2025 offering new opportunities and deductions, it’s a great time to start planning your taxes for FY 2025-26. Make sure to consult a tax professional if you need assistance with tax filing and strategy.

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