As india enters a clean tax filing season, male and female taxpayers were handed a transient bonus: the due date to record profits on tax returns (itrs) for FY 2024-25 has been prolonged from July 31 to september 15, 2025. This 45-day extension was granted to deal with the most important structural revamp in ITR bureaucracy as proposed in price range 2024. Even as the extension offers greater respiration room, it additionally brings a truthful percentage of complications, particularly concerning residence hire allowance (HRA) and capital profits reporting below the brand-new policies.

Experts caution that even true claims could attract notices if documentation, interpretation, or calculations are incorrect.

HRA Claims: Maximum Common Mistakes and the Way to Keep Away from Them

Residence Rent Allowance (HRA) is one of the most generally claimed exemptions under the antique tax regime. But professionals observe that it is also among the most misunderstood, leading to common errors and tax branch queries.

"There are numerous commonplace errors that taxpayers typically make at the same time as claiming HRA, which regularly cause notices and, in a few cases, additional tax burden," said CA Gaurav Makhijani, accomplice partner and Head of Tax (North india & Gujarat) at Rödl & Associate India.

He factors out that a chief error lies in misapplying the HRA exemption formulation, which is restrained to the lowest of the following three:

Actual HRA obtained

50% of revenue (for metro towns) or 40% (for non-metro towns)

Hire paid minus 10% of income

"Taxpayers regularly observe the 50% price for cities they anticipate are metros truly because they're evolved, despite the fact that the cities do not qualify beneath the Income Tax Act's definition of metros. This results in inflated exemption claims," Makhijani warned.

Renting from your own family members is some other complex place. Though technically allowed, it must bypass the scrutiny of a true transaction. "The Income Tax Act does not limit rent payments to mother and father or relatives; however, the transaction needs to be sponsored through proper documentation—lease agreement, financial institution transfers, lease receipts, and proof of true need," he stated.

Some other purple flag? Claiming each HRA and home mortgage deduction for residences in the same town. While it is able to be legitimate in many instances, it must be justified with clean motives, inclusive of loss of ownership, production delays, or impractical commuting distance from the workplace.

Finally, administrative info rely too. "In case your annual hire exceeds Rs 1 lakh, quoting your landlord's PAN is mandatory. Errors in quoting PAN or failure to deduct TDS (if the lease exceeds Rs 50,000/month) can invite disallowances and consequences," he added.

Manmeet Kaur, an associate at Karanjawala & Co stated, "In certain cases, it is also visible that anyplace the once-a-year rental amount exceeds Rs 100,000, there should be a signed settlement with the landlord reflecting the equal. Some other problem that taxpayers face is not always quoting the landlord's PAN card information in case the amount exceeds Rs 100,000 p.a. To avoid the same, it's far more beneficial to provide all applicable information about the landlord and to comply as much as possible to ensure that the same amount is mediated in his ITR at the time of filing."

Capital gains: New guidelines After Budget 2024 and Common Pitfalls

Capital profits taxation, especially post-budget 2024, has undergone an entire overhaul. The brand-new regulations, especially for belongings, mutual funds, and equity stocks, are relevant starting July 23, 2024, main to a cut-up tax regime for FY25.

"The whole capital gains structure has been revamped inside the budget for the sale of belongings in addition to fairness. These changes might want to be intently monitored and reflected as it should be inside the ITR," said vivek Jalan, partner at Tax Connect Advisory Offerings LLP.

When promoting a residential property, taxpayers may be eligible for certain exemptions/deductions at the capital profits'. For instance, deduction from long-term capital profits under phase fifty-four of the Profits Tax Act can be claimed provided the gains so earned are reinvested in every other residential asset within prescribed timelines, i.e., inside 12 months earlier than or years after the sale, or within 3 years if building a brand new domestic/residential property. There are a few other deductions as well. It isn't unusual to find taxpayers missing to say the exemption and/or failing to deposit the unutilized capital gains into the capital Profits Account Scheme (a unique account for claiming deduction). This ought to also be cautiously considered when submitting a tax return,' Makhijani added.

Belongings income (long-term):

Indexation blessings are to be had best for transactions earlier than July 23, 2024.

For income after this date, indexation may not be practiced, doubtlessly leading to a higher tax outgo.

"The icing on the cake," Jalan added, "is that the adjustments are applicable mid-year—from July 23—so for transactions between april and July 22, the vintage tax regime continues to apply."

What should taxpayers be more careful about in capital profits?

In keeping with Mr. deepak Kumar Jain, founder and CEO of taxmanager.in, incorrect capital gains reporting is a vast compliance gap among character filers.

He shared a checklist of not unusual errors:

Reporting incorrect sale figures or failing to file the sale of property

Misclassifying the keeping duration, resulting in the incorrect tax slab application

Not making use of indexation to long-time period capital profits where applicable

Lacking out on price-of-development deductions, which could inflate taxable profits

Failing to prompt capital losses that can help lessen taxable profits

Submitting returns after the due date, which disqualifies taxpayers from claiming capital loss benefits

"It's very critical to make certain correct claims are made even when filing income tax returns," Jain emphasized. "Do not declare a fake HRA without hire proof, or report capital gains without thinking about all benefits and deductions available under law."

Whilst filing earnings tax returns ('ITR') for capital gains, taxpayers often make critical mistakes, including no longer reporting gains, assuming they are exempt or already taxed; using the wrong ITR form (like ITR-1 rather than ITR-2 or ITR-3); misclassifying gains as short-term period or long-term and failing to apply indexation for fairness shares obtained'. Considering that the government cross-verifies the statistics from brokers, asset registrars, and banks, it's continually recommended to match your returns with what you file via Shape 26AS,' stated Kaur.

New ITR forms demand extra caution and documentation.

Beyond unique exemption policies, the made-over ITR bureaucracy put up finances for 2024 that require more granular disclosures—particularly around capital profits, house property, overseas earnings, and exemptions.

This has been a key purpose for the deadline extension, according to the significant Board of Direct Taxes (CBDT). Filers ought to now shape pre-filled information with actuals and offer transaction-degree information, growing the chance of mismatch or blunders.

Key Takeaways for FY25 Filers

Use the 45-day extension accurately—do not wait until september 15 to start return education.

Cross-affirm HRA claims with accurate exemption calculation, legitimate documents, and belongings info.

Make sure capital profits disclosures are cut up as they should be between pre- and post-July 23 transactions.

Avoid car-pilot filing—consult a tax advisor if you have asset income, home loans, or exemptions.

Hold proofs handy: lease agreements, financial institution transfers, sale deeds, fee invoices, and PAN information.

ITR 2025: New vs. Vintage Tax Regime—Which One Suits You?

Compliance is king in FY25.

With greater statistics-sharing among tax, banking, and real estate databases, paper trails and consistency in returns are under closer scrutiny than ever before.

Take the time this season no longer just to record, but to record smart.