Income Tax changes – Effective 1 July 2025

Significant updates are coming into effect on 1 July 2025 relating to PAN-Aadhaar linkage, ITR forms, e‑filing utilities, and payment deadlines. Here’s what you need to know:

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1️. Aadhaar Mandatory for New PAN Applications

From 1 July 2025, applicants seeking a new PAN card must link Aadhaar—no alternative ID proofs will be accepted. This aims to curb duplicate/fake PANs and strengthen identity verification. 

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2️. PAN–Bank Account Link API Live

From June 17, 2025, the I-T portal supports real-time PAN–bank account verification via the NPCI API. This enhances refund processing and reduces erroneous filings.

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3️. Extended ITR Filing Deadline—September 15, 2025

Originally due on 31 July 2025, ITR forms for AY 2025–26 can now be filed until 15 September 2025 (for non-audit taxpayers)—an additional 46 days. However:

• Any final/ self‑assessment tax must still be paid by 31 July 2025 to avoid interest and penalties.

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4️. ITR Forms & Utility Upgrades

Changes have been made across ITR forms (AY 2025–26):

Form	Key Updates
ITR‑1 / ITR‑4	Eligible now for limited LTCG (≤ ₹1.25 Lakh); Aadhaar enrolment field
ITR‑2 / ITR‑3	Separate reporting of capital gains split before/after 23 July 2024; share buyback gains require disclosure of dividend income
ITR‑5, ITR‑6	Updates similar to ITR-2 for trust and company filings
New ITR‑U Form	Enables correction of past returns (voluntary filing) as per Budget 2025; eligibility, deadlines, and penalties defined

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5️. Revised Tax Slabs & Deductions (FY 2025–26)

As per the Budget 2025, the new tax regime (default from FY 2025–26) includes:

• Zero tax up to ₹12 lakh
• Slabs:
• ₹4–8 Lkh: 5%
• ₹8–12 Lkh: 10%
• ₹12–16 Lkh: 15%
• ₹16–20 Lkh: 20%
• ₹20–24 Lkh: 25%
• Above ₹24 Lkh: 30%
• Standard deduction ₹75,000
• Section 87A rebate ₹60,000 → zero tax effectively up to ₹12 lakh

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6️. Deadline for Tax Payments – 31 July 2025

Though the filing window extends to September, all tax dues—including final/self-assessment taxes—should be paid by 31 July 2025 to avoid interest.

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✅ Action Checklist

1. 👉 PAN Applicants: Link Aadhaar before applying.
2. ✅ Bank Verification: Ensure PAN is linked to a bank account via portal.
3. 🛂 Download ITR Forms: Excel utilities for ITR‑1/4 are ready.
4. 📊 Select Correct ITR Form:
• Use ITR‑1/4 if LTCG ≤ ₹1.25L and conditions met.
• Use ITR‑2/3 for complex incomes.
5. ⏳ Pay Taxes by 31 July to avoid interest.
6. 📝 File Return by 15 Sept under extended deadline.