The Income Tax Department of India is rolling out several important changes from July 1, 2025, impacting PAN-Aadhaar linkage, ITR forms, e-filing utilities, and tax payment deadlines. Taxpayers, both individuals and businesses, must stay updated to avoid penalties and ensure smooth tax compliance.
Below is a detailed overview of all the major changes effective from July 1, 2025:
1. Aadhaar Made Mandatory for New PAN Card Applications
Starting July 1, 2025, individuals applying for a new PAN card must mandatorily link their Aadhaar number. No other identification documents such as Passport, Voter ID, or Driving Licence will be accepted for identity verification.
Why This Matters:
- Aims to curb fake or duplicate PAN cards.
- Ensures better identity verification and reduces fraudulent practices.
2. Real-Time PAN-Bank Account Linking System Introduced
From June 17, 2025, the Income Tax portal offers a real-time PAN and bank account linking facility powered by an API developed by the National Payments Corporation of India (NPCI).
Benefits of Real-Time Linking:
✔ Faster processing of income tax refunds.
✔ Fewer errors during ITR filing.
✔ Hassle-free PAN and bank account linkage.
Action Required:Â Ensure your PAN is correctly linked to your bank account to avoid delays.
3. ITR Filing Deadline Extended for AY 2025-26
The deadline for filing Income Tax Returns (ITR) for Assessment Year 2025-26 has been extended:
✅ New Deadline: September 15, 2025
✅ Applicable To: Non-audit taxpayers, including most salaried individuals and small business owners.
Important: Taxes such as final tax or self-assessment tax must still be paid by July 31, 2025. Failing to pay taxes on time may attract interest and penalties, even if your ITR is filed by the extended deadline.
4. Major Updates to ITR Forms and E-Filing Utilities
The Income Tax Department has introduced several updates to ITR forms for AY 2025-26. Here’s what’s new:
ITR-1 and ITR-4 (For Salaried Individuals and Small Businesses):
- Can now be used by taxpayers with long-term capital gains (LTCG) up to ₹1.25 lakh.
- A new field added to enter Aadhaar Enrollment Details if Aadhaar linking is in progress.
ITR-2 and ITR-3 (For Taxpayers with Capital Gains or Multiple Incomes):
- Capital gains must now be reported separately for gains made before and after July 23, 2024.
- Dividend income from share buybacks must be reported.
ITR-5 and ITR-6 (For Trusts and Companies):
- Same capital gains reporting rules as ITR-2 and ITR-3.
Introduction of New ITR-U Form:
- Enables voluntary correction of past returns.
- Introduced under Budget 2025 with specified eligibility criteria and deadlines.
Note: Revised Excel utilities for ITR-1 and ITR-4 are already available on the official Income Tax e-filing portal.
5. New Tax Regime Becomes Default from April 1, 2025
The New Tax Regime is now the default tax structure for taxpayers from Financial Year 2024-25, effective April 1, 2025. Here are the highlights:
Revised Tax Slabs Under New Regime:
| Income Range (₹) | Tax Rate |
|---|---|
| 4 lakh – 8 lakh | 5% |
| 8 lakh – 12 lakh | 10% |
| 12 lakh – 16 lakh | 15% |
| 16 lakh – 20 lakh | 20% |
| 20 lakh – 24 lakh | 25% |
| Above 24 lakh | 30% |
Additional Benefits:
- Standard Deduction: Increased to ₹75,000.
- Section 87A Rebate: Up to ₹60,000, meaning no tax payable for income up to ₹12 lakh under the new regime.
Taxpayers still have the option to switch to the old tax regime if it provides better tax savings, but this change must be done manually during ITR filing.
Conclusion: Stay Compliant and Plan Early
These income tax updates aim to simplify tax processes, enhance transparency, and improve efficiency for taxpayers. Make sure to:
✔ Link your Aadhaar with your PAN (mandatory for new PAN applicants).
✔ Verify PAN-bank account linkage for smooth refund processing.
✔ Pay any due taxes by July 31, 2025, even if you opt for the extended ITR filing deadline.
✔ Choose your tax regime wisely based on your income structure.
✔ Stay updated with revised ITR forms and utilities for accurate return filing.
For the latest resources, visit the official Income Tax e-filing portal.