Income Tax Return Filing Services

Form 16 for government employees is calculated from March to February due to the government's financial accounting cycle, which aligns with budget planning. This differs from the standard financial year (April to March).

Calculation Logic: Government departments estimate annual income from March to February to align with budget cycles, facilitating TDS calculations and year-end accounting. This is standard practice for government salary processing.

ITR Handling: In ITR (typically ITR-1), report the salary and TDS as per Form 16. For FY 2024-25, if Form 16 covers March 2024 to February 2025, include these figures in your ITR for FY 2024-25. Salary for March 2025, if paid in April 2025, will appear in FY 2025-26’s Form 16.

Example: Salary from March 2024 to February 2025 is ₹6 lakh with TDS of ₹30,000. Report ₹6 lakh as salary income and ₹30,000 as TDS in FY 2024-25 ITR. Cross-check with payslips to avoid errors.

Note: Always verify Form 16 with payslips to ensure accuracy and consult a tax professional for complex cases.

The new tax regime offers lower tax rates but fewer deductions and exemptions compared to the old regime. Below is a detailed comparison for FY 2024-25 and FY 2025-26

**Comparison Table: Exemptions and Deductions (Old vs New Regime)**

Futures and Options (F&O) income is classified as "business income" (non-speculative) under Section 43(5), while intraday trading is "speculative business income." Below is the updated process for reporting, reflecting ICAI’s latest guidance.

Turnover Calculation (Updated):
- Futures: Sum of absolute profit/loss from all trades.
- Options: Absolute profit/loss only. Premium received on options sold is not included in turnover, as per ICAI’s Guidance Note on Tax Audit (2023).
- Intraday: Sum of absolute profit/loss from all trades.

Examples:
Futures: Buy 1 lot of NIFTY futures at ₹20,000, sell at ₹20,500.
- Profit: ₹500
- Expenses: ₹50 (brokerage)
- Net Profit: ₹450
- Turnover: ₹500 (absolute profit)

Options: Sell a call option, premium received ₹200; buy back at ₹150.
- Profit: ₹50
- Expenses: ₹10 (brokerage)
- Net Profit: ₹40
- Turnover: ₹50 (absolute profit/loss, premium excluded)

Intraday: Buy 100 shares at ₹100, sell at ₹95 same day.
- Loss: ₹500
- Expenses: ₹20
- Net Loss: ₹520
- Turnover: ₹500 (absolute loss)

ITR Reporting: Use ITR-3, Schedule BP. Report turnover, expenses, and net profit/loss. F&O losses can offset other non-speculative business income, but speculative losses (intraday) are restricted.

Audit Requirement: Tax audit under Section 44AB is mandatory. if turnover exceeds ₹10 crore, or if profit is less than 6% of turnover and total income exceeds the basic exemption limit.

Source: [ICAI Guidance Note on Tax Audit (2023)].

Tip: Maintain trade-wise records and use broker’s P&L statement for accuracy. Consult a CA for audit compliance.

Filing ITR after the due date (July 31, 2025 for non-audit cases in FY 2024-2025) restricts loss carry-forward under Section 80. Below is the details:

Losses Allowed (Late Filing): -

• Unabsorbed Depreciation: Indefinite carry-forward
• House Property Loss: Up to Rs. 8 assessment years

• Business Losses: Includes F&O and speculative losses (intraday)
• Capital Losses: Short-term and long-term Rs.
• Losses from Owning Racehorses
• Other Income Losses: Except family pension

FY 2024-25:

• New Regime: ₹25,000 rebate for income up to ₹7 lakh (tax-free).
• Old Regime: ₹12,500 rebate for income up to ₹5 lakh.

• New Regime: ₹60,000 rebate for income up to ₹12 lakh (tax-free).
• Old Regime: ₹12,500, unchanged.

The auditee recognizes audit fees as an expense in the current financial year (e.g., FY 2024-25), as it pertains to that year’s audit, while also accounting for TDS and creating a provision in the same period. Conversely, the auditor typically issues the invoice in the subsequent financial year (e.g., FY 2025-26) for audit services rendered in FY 2024-25. For the auditor, this income is recorded in FY 2025-26. The corresponding TDS, reflected in the auditor’s Form 26AS for FY 2024-25, is carried forward in the auditor’s ITR for FY 2024-25 and claimed in the ITR for FY 2025-26, aligning with the income recognition.

Accounting Entries:

Section 44AD: Presumptive taxation for businesses with turnover up to ₹3 crore (FY 2024-25 onwards).

Advance Tax: Single installment by March 15, due to simplified compliance and late-year turnover clarity.

Example: ₹1 crore turnover, ₹6 lakh income (6%). Tax ₹23,400, payable by March 15, 2025.

Notes: Interest under Section 234C if not paid by March 15. Regular rules apply if turnover exceeds ₹3 crore.

Tip: Estimate turnover by March for accurate payment.

Old Regime Notes: Standard deduction of ₹50,000 for salaried individuals. Deductions under Section 80C (₹1.5 lakh), 80D, HRA, home loan interest, etc. Rebate under Section 87A up to ₹12,500 for income up to ₹5 lakh. 4% Health and Education Cess applies.

New Regime Notes: Standard deduction of ₹75,000 for salaried individuals. Rebate under Section 87A up to ₹25,000 for income up to ₹7 lakh (tax-free). 4% Health and Education Cess applies.

Old Regime Notes: Standard deduction of ₹50,000 for salaried individuals. Deductions under Section 80C (₹1.5 lakh), 80D, HRA, home loan interest, etc. Rebate under Section 87A up to ₹12,500 for income up to ₹5 lakh. 4% Health and Education Cess applies.

New Regime Notes: Standard deduction of ₹75,000 for salaried individuals. Rebate under Section 87A up to ₹60,000 for income up to ₹12 lakh (tax-free). 4% Health and Education Cess applies.

Notes:

• Section 111: Applies slab rates as normal income
• Section 111A: Applies to short-term capital gains on listed equity shares, equity-oriented mutual funds, and business trust units sold on or after July 23, 2024(Ch VI-A not available but slab rates & rabate u/s 87A(in old regime) benefit will be available)
• Section 112: Applies to long-term capital gains on assets like immovable property. Indexation benefit removed from July 23, 2024.
• Section 112A: Applies to long-term capital gains on listed equity shares and equity-oriented mutual funds. Exemption threshold of ₹1.25 lakh for whole FY(Ch VI-A and Rebate u/s 87A benefit not available but slab rates benefit will be available. However, while calculating GTI, Income is to be included w/o giving effect of the indexation.
• Surcharge: Maximum 15% for capital gains under Sections 111A and 112A.
• Cess: 4% Health and Education Cess applies on all tax amounts.

Note: No significant changes to ITR form applicability for FY 2025-26. Always select the correct form to avoid defective returns. Consult a tax professional if unsure.

Source: [Income Tax India - ITR Forms](https://www.incometaxindia.gov.in/), [Taxguru.in - ITR Applicability](https://taxguru.in/income-tax/itr-filing-guide-fy-2024-25.html).