How to File Income Tax Return 2025: Complete Step-by-Step Guide
What is Income Tax Return (ITR)?
An Income Tax Return (ITR) is a form that taxpayers in India use to declare their income, expenses, tax deductions and taxes paid to the Income Tax Department. Filing ITR is a legal obligation for individuals and entities whose income exceeds specified limits under the Income Tax Act. It also serves as proof of income and enables taxpayers to claim refunds for any excess tax paid.
Why is Filing Income Tax Return for 2025 Important?
Besides, being a legal formality, filing ITR will offer you benefit:
- Enables you to claim tax refunds if excess tax has been deducted.
- Acts as proof of income for loan approvals.
- Ensures compliance with tax laws, avoiding penalties.
- Builds financial credibility with banks and NBFC such as Godrej Capital.
- Allows carry forward of losses for future tax benefits.
Who Should File Income Tax Return for FY 2024-25?
The following individuals and entities are required to file an ITR for the financial year 2024-25:
- Individuals with income above ₹2.5 lakh (₹3 lakh for senior citizens and ₹5 lakh for super senior citizens).
- All companies, firms and LLPs, regardless of income.
- Residents with assets outside India.
- Non-residents earning income in India.
- Those wishing to claim a tax refund.
Understanding Financial Year (FY) 2024-25 and Assessment Year (AY) 2025-26
The financial year (FY) is the period in which income is earned, running from 1 April 2024 to 31 March 2025. The assessment year (AY) is when the income earned in FY is assessed and taxed, which in this case is AY 2025-26. For example, income earned between April 2024 and March 2025 will be reported in AY 2025-26.
Key Deadlines and Penalties for Filing ITR 2025
The deadline for filing ITR for FY 2024-25 (AY 2025-26) is 31 July 2025 for most taxpayers, but now has been extended till 15 September 2025, without any penalty.
Missing the 15 September deadline may attract penalties:
- ₹5,000 penalty if filed after due date but before 31 December 2025 for individuals earning over ₹5 lakhs; ₹1,000 if the individual earns below ₹5 lakhs; and no penalty if individual earns below ₹2.5 lakhs.
- ₹10,000 penalty if filed after 31 December 2025 for individuals earning over ₹5 lakhs.
- Interest under Section 234A may apply on late filing of ITR.
Additionally, losses cannot be carried forward if the return is filed late.
What is New in Income Tax Return Filing for AY 2025-26?
The Central Board of Direct Taxes (CBDT) introduces changes to ITR forms each year. For AY 2025-26, updates include mandatory disclosure of foreign remittances, separate reporting for income from digital assets such as cryptocurrency and capital gains. Taxpayers should review these updates carefully before filing.
Also Read: Old Tax Regime vs. New Tax Regime – Which Tax Regime is Better for Income Tax Return Filing?
Choosing the Right ITR Form for FY 2024-25
Different ITR forms apply based on the nature of income with conditions applied. Choosing the correct form is crucial to avoid rejection:
- ITR-1: Salaried individuals with income up to ₹50 lakh
- ITR-2: Individuals and HUFs with income from capital gains, foreign asset or multiple properties
- ITR-3: Individuals with business or professional income
- ITR-4: Presumptive taxation scheme users
- ITR-5, 6, 7: For firms, companies, LLPs and trusts
Essential Documents Required for Filing Income Tax Return 2025
Ensure you have the following documents before filing:
- PAN and Aadhaar card
- Form 16 from employer
- Form 26AS and AIS for tax credit
- Bank account details
- Investment proofs for deductions under Section 80C, 80D, etc
- Capital gains statements
- Details of rental income and Home Loan interest
Also Read: Home Loan: All You Need to Know
Step-by-Step Process to File Income Tax Return Online (E-Filing) for AY 2025-26
- Visit the official income tax portal: https://www.incometax.gov.in.
- Log in with PAN/Aadhaar and password.
- Select 'File Income Tax Return' and choose AY 2025-26.
- Select the applicable ITR form.
- Pre-fill and verify personal and income details.
- Report income from all sources and claim deductions.
- Calculate tax liability and pay dues, if any.
- Submit the return and complete e-verification.
Be cautious of phishing websites and always use the official portal.
Common Mistakes to Avoid While Filing ITR 2025
- Using the wrong ITR form
- Failing to report interest income from savings accounts
- Missing income from capital gains
- Not linking PAN with Aadhaar
- Entering incorrect bank details
- Delaying e-verification after filing
How to Verify Your Income Tax Return After Filing
After filing, the ITR must be verified to be considered valid. Verification can be done online through Aadhaar OTP, net banking, bank ATM or by sending a signed ITR-V form to CPC Bengaluru. E-verification is faster and strongly recommended.
Why Filing ITR Online is the Smart Choice in 2025
Online filing offers faster processing, quicker refunds, reduced chances of errors, ease of access, and eco-friendliness. It also allows you to track the status of your return easily.
FAQs
Q.1. What is the last date to file income tax returns for FY 2024-25?
A. The due date is 31 July 2025, unless extended by the government. For this year, the deadline is extended till 15 September 2025.
Q.2. Which ITR form is applicable for freelancers in 2025?
A. Freelancers typically file ITR-3 if declaring actual income, or ITR-4 if opting for presumptive taxation.
Q.3. How can I correct mistakes after submitting my ITR?
A. You can file a revised return under Section 139(5) before 31 December 2025.
Q.4. Can I file ITR without PAN or Aadhaar?
A. PAN is mandatory, while Aadhaar is required for most taxpayers unless exempted.
Q.5. How long does it take to get a refund after filing ITR online?
A. Refunds are usually processed within 20–45 days, depending on verification and bank processing.
Disclaimer:
The contents of this article are for information purposes only and not a financial advisory. The information is subject to update, revision, and amendment and may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject Godrej Capital or its Affiliates to any requirements. Godrej Capital or its Affiliates shall not be responsible for any direct/indirect loss or liability incurred by the reader for making any decisions, financial or otherwise based on the contents and information mentioned. For more information, please visit www.godrejcapital.com.
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