
PFC's repeated withdrawals could hit fresh zero-coupon debt issuances
Following approval from the Central Board of Direct Taxes (CBDT) on 11 March 2025, PFC decided to launch its 10-year zero-coupon bonds, according to an official notification, with a base issue size of ₹500 crore and a green shoe option to raise additional ₹1,500 crore in the event of high demand from investors.
Business Standard reported on Monday, citing sources, that PFC has withdrawn its zero-coupon bond issuance for the second time in just over a month, as investors demanded higher yields than what the issuer was willing to offer. PFC had previously withdrawn the issuance on 30 April, 2025.
Also read: Power Finance Corporation Q3 results: Net profit rises 23% YoY to ₹5,829 crore, announces third interim dividend
'The subdued response on Monday (to the PFC bond issuance) from both arrangers and investors suggests that issuers may need to revisit their strategy, timing, and pricing assumptions. Although CBDT approvals provide flexibility over the issuance window, market conditions will ultimately dictate whether ZCBs can sustain their relevance," said Venkatakrishnan Srinivasan, founder and managing partner of financial advisory firm Rockfort Fincap LLP.
Last year, another state-owned company REC Ltd raised ₹5,000 crore in zero-coupon bonds at an aggressive price, which led to other issuers queueing up to launch such bond sales.
Srinivasan said the REC issue, priced at a 6.25% coupon, was roughly 61 basis points (bps) below the 10-year government bond yield (6.86% annualized at the time) and nearly 80-90 bps lower than comparable taxable bonds from similar AAA-rated issuers.
'Market participants at the time saw zero-coupon bonds as a viable substitute to the erstwhile tax-free bonds, especially when the market linked debenture (MLDs) too as a tax saving instrument phased out," said Srinivasan.
According to him, while G-sec yields have softened significantly since April, driven by surplus liquidity, successive rate cuts, and a dovish RBI stance—the yields on zero-coupon bonds (ZCBs) have, paradoxically, hardened in the secondary market. This disconnect, he explained, stems from poor secondary market liquidity in ZCBs, which persists despite the overall abundance of systemic liquidity and monetary policy measures. As a result, investors and arrangers who aggressively bid at lower yields last year in the primary market are now facing challenges.
Also read: HUDCO Q4 Results: PAT rises 4% to ₹728 crore YoY, NBFC declares final dividend of ₹1.05 per equity share
Zero-coupon bonds approved by the CBDT are debt instruments issued at a discount to face value and redeemed at face value, with no periodic interest payments. These bonds, often issued by government entities, are primarily used for infrastructure financing. CBDT approval grants them a specific tax treatment, classifying gains on redemption as long-term capital gains, which are generally taxed at a lower rate than regular income. The zero-coupon bonds not approved by the CBDT are issued by corporates and high-yield entities, and fall under regular income tax rules. So, returns from these bonds are taxed as per the investor's applicable income tax slab.
Before the PFC issue, there was quite a bit of interest among public sector enterprises. According to a Reuters report in April, six state-owned companies have sought approval from the government to issue deep discount bonds. These include Indian Railway Finance Corp. (IRFC), Indian Renewable Energy Development Agency (IREDA), Power Grid Corp. of India, REC, Small Industries Development Bank of India (SIDBI) and National Bank for Agriculture and Rural Development (NABARD).
That apart, Housing and Urban Development Corporation Ltd (HUDCO) in April received CBDT approval for issuance of zero-coupon bonds of ₹5,000 crore, according to an official notification. Indian Railway Finance Corporation Ltd, in May, also received approval from CBDT for issuance of its 10-year zero-coupon bond with ₹10,000 crore to be paid on maturity. PFC and REC are among the government entities that have received CBDT approval.
Emails sent to PFC, REC, IRFC, Power Grid, SIDBI and HUDCO remained unanswered till press time. NABARD declined to comment. When asked about IREDA's plan for the upcoming zero-coupon bond issuance following PFC's withdrawal, its spokesperson redirected Mint to a press release issued on Wednesday, stating that the company had raised ₹2,005.90 crore through a qualified institutional placement (QIP).
The value of zero-coupon bonds raised by both private and public entities was at ₹44,009 crore in FY24 and at ₹32,184 crore in FY25, according to data from Prime Database. This data include both CBDT-notified and non-notified zero-coupon bonds. In FY25, major issuers included Porteast Investment Pvt. Ltd, Reliance Capital Ltd, Jsquare Electrical Steel Nashik Pvt. Ltd, besides others.
Experts said CBDT-approved zero-coupon bonds still offer structural advantages, such as favourable capital gains tax treatment, zero reinvestment risk, and issuance by AAA-rated public sector entities. However, the lack of secondary market depth and declining relative value are reducing investor enthusiasm.
'Zero coupon bonds offer returns by being issued at a discount and redeemed at face value, and the internal rate of return reflects what an investor earns if the bond is held till maturity. These bonds are treated as debt for tax purposes, so the gains are usually taxed as interest at the investor's slab rate," said Anil Gupta, senior vice-president and group head of financial sector ratings at Icra. 'But if held for more than one year, the returns may qualify as long-term capital gains with indexation benefits. That makes them more tax-efficient than traditional debt products, especially for long-term investors in higher tax bracket," said Gupta.
Others also pointed to the taxation benefit on these bonds and said that zero-coupon bonds are gaining traction with high-net-worth individuals (HNIs).
Also read: Direct tax authority charts route to achieve target after ₹1 tn relief
'These bonds also offer cash flow efficiency, as there's no interest payment during the tenure, and the entire bond matures at face value, implying that all interest payments are reinvested at the same yield," said Suresh Darak, founder and chief executive officer of fintech platform Bondbazaar.
He said investors in this segment are willing to invest at regular intervals based on their cash flow and income needs. However, since these bonds are privately placed and listed bonds, intermediaries need to subscribe in the primary market and distribute them to HNIs in the secondary market.
'Given the yield is around 5.5-6%, intermediaries face a negative carry of nearly 2% due to borrowing at higher rates. This sometimes leads to a slightly higher primary yield if demand is spread over the next few months to cover the upfront negative carry for intermediaries," said Darak.

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Indian Express
4 hours ago
- Indian Express
As the economy grows, so would tax collection; hopeful of meeting FY26 target: CBDT Chairman Ravi Agrawal
The net direct tax collections may have slowed down, but the Income Tax Department is 'comfortable and hopeful' of meeting the target for the ongoing financial year 2025-26, Central Board of Direct Taxes (CBDT) Chairman Ravi Agrawal said. In an interview with Aanchal Magazine, the CBDT Chairman listed several measures including the various 'nudge' campaigns being taken by the Department to boost compliance that has already resulted in filing of over 1.1 crore updated returns and collections of over Rs 11,000 crore. However, there is scope for further increase in the number of returns filed by taxpayers. Edited excerpts: There is a moderation in direct tax collections. Till July 10, it was 1.3 per cent down year-on-year. Is it because of the income tax benefits given in the Budget? How are you assessing the trend vis-a-vis the target? When this overall net tax collection (budget estimate) was given to us, at that point, this element (income tax cut) was also factored in while arriving at the figure and while estimating the tax buoyancy, this was factored in. We are hopeful that it will be done. So far as the reduction is concerned, that was primarily attributable to higher refunds outgo. Also, the fact that if you compare July last year versus July this year, the difference is that the due date for filing the return was July 31, and self-assessment tax was also coming. Since the due date has been shifted, that collection to that extent has basically taken a hit to that extent. But then, going forward, we feel that as the economy grows, so would the tax collection because ultimately taxes are derivative of economic growth. So, economic growth, and then better tax administration, would definitely yield. We are comfortable and hopeful of meeting the target. How is the Income Tax Department making use of digital technologies to boost compliance? On an annual basis, the department captures around 650 crore transactions data from different sources. These transactions are collated, and for about 40 crore PANs, Annual Information Statements (AIS) are generated. This has the data of your TDS, tax payment, any transactions that have been done with different parties, maybe immobile property, or shares or mutual funds or any other. That is reflected on the portal online that is available to the taxpayers. And it's not only available to the taxpayers, they are seeing it, which is an interesting statistic, to me it was very interesting. If you see in FY 2024-25, about 7.42 crore taxpayers actually saw their AIS. And the number of times they actually visited, on an average, if we see, it's about three and a half times. That means the visits to the AIS module of ours was 24 crore times. The point I'm trying to make is that one, you collate this information, this information is corresponding to more than 40 crore taxpayers and more than 7.5 crore taxpayers actually see this multiple times. This becomes a reference point basically for the taxpayer to see their ledger, take a call, what are the taxes to be paid like advance tax and all, whether it has to be paid or not and the return that has to be filed, what is the income that has to be reflected, which means that there is a wide acceptability of the information and the ledger in the form of AIS that is being shown to the taxpayer. It also reflects their confidence in the information that is being shown. 9 crore people are filing the returns and you have more than about 40 crore people in whose case this AIS has been updated. So therefore we can say that yes, there is a scope for further increase in the number of returns that have been filed. What is the role of AI in such analysis? In that context, now we come to what is the role of AI? So, one is, who ought to file the return is not filing. You have this data. Based on that, you can come up with potential cases and then correspond with them electronically. So whatever coordinates you have, you can inform. The second component is whosoever is filing the return, whether a correct return has been filed or not. In case, there is an obvious gap or something which needs to be flagged and from the taxpayer nudge him towards better compliance, and right compliance. And the third component is: if you find that the taxpayer is repeatedly committing a mistake, can there be a case of a harder nudge? So these are components of tax administration that we are working on and where AI is helping. Because AI is then raising red flags in all these transactions and saying: okay, this maybe you would like to consider. And based on that we do a ABC sort of analysis, the numbers are huge…every year some 9 crore people would file returns and then you have to do that analysis. This is the extent and volume of e-governance in the tax department. The direct tax department is huge and if you see the profile of the taxpayer, that spectrum is also really very very wide wherein on one hand, you have a technologically-challenged taxpayer to a very, very matured taxpayer who is very, very technology savvy. So you have to build a system to make sure that the wide spectrum of people are able to see and find value with it. We have seen on the indirect tax side also, like for GST, a move towards capturing the unregistered persons. Is there a similar move from the direct tax side to expand the tax net to the ones who are not filing returns? Basically, what has to be seen is that the taxpayers' base is also increasing. And also the number of people who are filing the returns are also increasing. More and more awareness once it comes, naturally the compliance will go up. So I would not put this number that all these 40 crore people were supposed to file the return and they ought to be our taxpayer. No, not that. But, yes, there is a scope for improvement. And then how do we nudge the taxpayer? How do we prompt the taxpayer to come look at their transactions and then if there is a requirement of filing a return, the person would. I think the awareness is there all across, the communication is also fast, so, by and large, now the taxpayer is also aware about the obligations. It's not that the taxpayer is not aware about it. They are taking that call. And once more and more the data gets matured and it gets populated and you are able to reflect it online, people will take care. Especially, younger generation. How is the Tax Department flagging these gaps to the taxpayers? Our systems create a 360-degree profile of taxpayers' financial transactions and flag any inconsistencies between their declared income and their financial activities. The in-house 'Project INSIGHT', uses advanced data analytics to collate information from various sources, including bank reports, financial institutions, sub-registrars of properties etc. The Department proactively nudges taxpayers suspected of making wrong claims or omissions to update their returns and pay the correct tax. The success of this approach is visible in the outcome of the 'nudge' campaigns. In the Foreign Income and Assets Nudge Campaign, based on matching data received under automatic exchange of information, 19,501 taxpayers were nudged. This resulted in 62 per cent of them revising their returns, and a total of 30,161 taxpayers declared foreign assets worth Rs 29,208 crores and foreign income of Rs 1,089 crore during the campaign period. For false claims, data analytics identified over Rs 9,000 crore in excess deductions claimed under Section 80GGC. Nudging taxpayers through SMS and emails led to a reduction of Rs 963 crore in deductions and the payment of Rs 409.50 crore in additional taxes as of June 18, 2025. The Virtual Digital Assets Nudge Campaign is also ongoing, wherein the taxpayers are being nudged through SMS and e-mail to revisit claims made in ITRs related to TDS under Section 194S versus Schedule VDA filings. The updated return facility (ITR-U) has seen significant success. As of June 18, 2025, a total of 8,892,395 updated ITRs have been filed, generating Rs 9577.06 crore in additional taxes. Overall, over 1.1 crore updated returns have been filed, collecting more than Rs 11,000 crore. By proactively providing taxpayers with information about their financial transactions, we encourage voluntary compliance. How is the Department communicating with the taxpayers? We are communicating with non-filers…there is an ABC analysis that we do to find which people have entered into larger transactions, and who are not filing. Maybe a person had filed earlier in the earlier year, but has chosen not to file this year. So then you can identify those people and try to also see rational from our end through AI. What could be the reason that this guy has not filed now. For example, the person may have entered into an immovable property transaction in one year, and subsequently, it may not be so. It may be something like that the income does not fall above the threshold. You see all those cases, see the high-end cases and then correspond with them through emails in the database or from other data sources. Recently, there were search operations at 150 locations. Was it a similar exercise? This was basically an exercise in that direction. The taxpayer reports certain income, and while calculating their income, reports certain exemptions or deductions which are taken on face value and the system processes. But what we found through AI was that there were gaps, and they were really patterns that emerged, which reflected that the deductions and the exemptions that were claimed were not the correct deductions/exemptions. So, therefore, our pan-India exercise was undertaken to also flag and bring home the point that while we trust the taxpayer, but then at the same time, incorrect claims of deductions and exemptions are not acceptable, and we have not actually gone to the taxpayer per se. We have gone to the intermediary or the facilitator who is misguiding the taxpayer and identify those people. Those could be professionals or intermediaries. Through those, more than 1.5 lakh PANs have been identified. The exercise is still going on. At times, what happens is that the intermediaries give false promises of refunds, and potentially the taxpayer may not be aware of what is being filed. So one has to be cautious about it because it has implications. Since it is an end-to-end, e-enabled service that the tax department is providing, unless the taxpayer gives us the right coordinates of email and mobile, it becomes really very difficult for the tax department to correspond with the taxpayer. If an email of an intermediary is given, or a temporary email of an intermediary is given, then naturally the correspondence would go or the letter would go to that very email which is not being seen by anyone, and therefore, the taxpayer ultimately takes a hit. Like, we are committed to providing refunds as soon as possible. The average time for refunds is 17 days now (38 days in 2020-21) after returns are filed. But how do we give it unless, until the taxpayer actually gives the right coordinates. How is the Tax Department selecting cases for scrutiny? The Computer Assisted Scrutiny Selection (CASS) is a technology-driven system used by the Income Tax Department to select income tax returns for scrutiny, aiming to ensure efficiency, transparency, and objectivity. The CASS risk rules and selection parameters are regularly reviewed and updated to adapt to evolving tax evasion patterns, compliance behaviors, and policy changes. This includes incorporating new data sources like enhanced TDS and SFT reporting for more precise risk assessments. Approximately 0.3 per cent of all income tax returns filed annually are selected for scrutiny, including cases chosen under CASS and other mechanisms like reopening. The proportion specifically selected under CASS typically ranges from 0.05-0.2 per cent of total annual returns filed. For FY 2024-25, about 2.5 lakh cases were selected for scrutiny, representing only about 0.29 per cent of total ITR filers. The Department operates on a 'Trust First and Scrutinise Later' philosophy, focusing on high-risk cases rather than random selection. You mentioned email addresses being incorrect or temporary. Apart from electronic communication, is there any other method of communication which the tax department is exploring since PAN is Aadhaar linked and you can go back to check addresses? No, we would prefer only an e-route. One, that is trackable also. There's an audit to it also. And, ultimately overall you see that it makes our service fast. Look at the volumes. What we would encourage is correspondence through e-mails. The Select Committee has submitted its report on the new Income Tax Bill. There were a lot of concerns raised by digital rights activists about privacy about the storage of data which the tax department would be accessing during an investigation. Say, there is personal or privileged communication between family members or doctors/lawyers. How will the income tax department ensure that that trust is not breached or misused during a probe? First, from a regulatory point of view, statutory permissions are there which mandate the tax department to actually not part with the data in an unauthorised manner. It's a legal obligation. Having said that, practically, in practice, how are we going to go about it? We have put in place a mechanism where this information or this data is scrutinised in a sanitised environment by authorised people. And also, the data which gets raised but which pertains to the privacy domain, is redacted and only the relevant data is investigated. We are also now coming up, we are in the process of defining procedures wherein these things could be made more tight to take care of a taxpayer. It is a genuine concern of the taxpayer. But, then you see, how do you investigate? There's a mobile, there is a personal chat also here, there's a financial transaction also. So, say, it's WhatsApp, it's both. You got to maintain the evidentiary value of this mobile also. It cannot be that at that point in time, you say I'll take this but I'll not take the other part. There would be continuity. So, therefore, to maintain the evidentiary value, you have got to capture the data in toto. But then once you have captured the data, it's the responsibility of the tax department to ensure that whatever investigation is done, only the relevant data is actually analysed, and the other data is redacted. So will there be specific rules for the new investigation process based on the new bill? If you see the manual that we have come out with, the search and seizure manual, we have put that also as one of the requirements. We are also coming up with the digital manual for analysis of digital evidence. There also we would be actually taking care of it. So, we will address it. What is the pendency of cases in direct taxes? And how are you going to address it? Yes, there is a pendency. About 5.5 lakh cases are pending. So we have taken certain steps. For example, last year we came up with this VSVS 2024 scheme (Vivad se Vishwas Scheme), and 40,000 people participated in that. To that extent, those were taken care of. Now, what we have done is that we have expanded the numbers of commissioner appeals. Officers who were doing appellate ones. We have also given appeal work to principal commissioners. We have tried to profile appeals with similar issues, Identify which can be low-hanging fruits for easy disposals. We have tried to give numbers, scores to the appeals, which actually prompt the officers to dispose of more appeals. So these are the steps that have been taken. In fact, if you see last year, we disposed of about 1.75 lakh appeals at the first appellate level in FY25, which was a substantial percentage increase of 55.18 per cent over 2023-24. And more so, the number of disposals were more than the number of new appeals instituted. So that in fact, for the first time, this came down but we are very conscious about it. The Select Committee was also insistent, and rightly so, that we should actually work on reducing the appellate pendency. Primarily this happened because at the time of Covid, the appeal disposal was not so high. So all those things were there. But we are taking all the steps. So this year, you are looking at reducing… Yes. In a big way, we are trying to reduce. We have already set for ourselves a target of more than 2 lakh for this year, but then we will not rest at that and we'll try to (reduce it) further. Aanchal Magazine is Senior Assistant Editor with The Indian Express and reports on the macro economy and fiscal policy, with a special focus on economic science, labour trends, taxation and revenue metrics. With over 13 years of newsroom experience, she has also reported in detail on macroeconomic data such as trends and policy actions related to inflation, GDP growth and fiscal arithmetic. Interested in the history of her homeland, Kashmir, she likes to read about its culture and tradition in her spare time, along with trying to map the journeys of displacement from there. ... Read More


Mint
a day ago
- Mint
These bonds offer tax exemption on long-term capital gains. But are they right for you?
When you sell property or assets and make substantial capital gains, your instinct is to minimise the tax you'll pay. One instrument that can help with this is a capital gains bond, also known as 54EC bond, which offers a tax exemption on long-term capital gains if bought withing six months of selling the asset. These bonds, named after Section 54EC of the Income Tax Act, 1961, are issued by government-approved entities such as Power Finance Corporation Limited (PFC), Indian Railways Finance Corporation Limited (IRFC), and Rural Electrification Corporation (REC). However, with a fixed return of 5.25% and a five-year lock-in, are they the best use of your money? If you can earn an annual return of more than 8% elsewhere – say, in a mutual fund – you may be better off paying the tax and investing the rest. Over five years, an 8% annual return on the post-tax amount could surpass the maturity value of a 54EC bond. Mint spoke with experts to help you decide which option is right for your financial goals and risk appetite. What do the experts say? Harshad Chetanwala, co-founder of explained, "Suppose I have capital gains of ₹25 lakh from a property. The entire ₹25 lakh needs to be invested in 54EC bonds within six months to claim the tax exemption. It offers a return of 5.25% over five years. Alternatively, if pay 12.5% long term capital gains tax and invest the remaining sum in a mutual fund or similar instrument yielding around 8%, the final outcome turns out to be quite close." 'If someone can generate 9% or more through balanced advantage or multi-asset funds, the mutual fund strategy will yield a higher post-tax corpus, provided one is comfortable with the higher risk," Chetanwala added. Mutual funds, especially hybrid ones such as balanced advantage funds (BAFs) and multi-asset funds, can offer long-term returns exceeding 10%, but they carry market risk. Amit Sahita, director at Fincode Advisory Services Pvt. Ltd, said, "I am always in favour of avoiding products like 54EC bonds, which optically save tax but actually end up locking up funds with very low returns over long periods. We have always advised our investors to pay the tax and then invest according to their risk profile and timeline." He added, 'The cap for 54EC Bonds is ₹50 lakh, so extremely risk-averse investors, those who prioritise capital protection and guaranteed returns over higher growth, do end up buying them. But the usual strategy of paying tax and investing in a mix of debt and equity funds works better." What about liquidity? Liquidity is another significant factor. 54EC bonds come with a five-year lock-in, while mutual funds offer easier redemption options and allow for rebalancing – a critical advantage in uncertain markets. Ajay Vaswani, a chartered accountant and an NRI tax advisor, said, 'You can pay the capital gains tax and then invest the remaining funds in more liquid and potentially higher-return instruments like mutual funds. These offer greater flexibility, and over time, could provide better returns," he said. He added, "If you're in the 30% tax bracket, your post-tax return from 54EC could further fall since the interest is taxable, which is barely above inflation." This erodes the appeal of 54EC bonds further, especially for high-net-worth individuals." While the math may favour mutual funds, human behaviour tells a different story. Abhishek Kumar, a Sebi-registered investment advisor and founder of SahajMoney, said, "Most individuals prioritize immediate tax savings over long-term investment growth. When people sell property, they're often more focused on saving taxes than making investment decisions that are aligned with their financial goals." Ultimately, the choice between 54EC bonds and paying capital gains tax to invest elsewhere is a personal one. Factors such as your tax bracket, investment horizon, risk appetite, and portfolio composition all come into play. 'If your debt portfolio is underfunded, investing in government bonds could make sense. The key is to look beyond immediate tax saving and consider long-term financial growth and portfolio balance," Kumar said. Final thoughts For conservative investors or those looking to boost their fixed-income allocation, 54EC bonds can serve a purpose. But for those with a medium to long-term horizon and a willingness to take risk, paying the tax and investing in a diversified mutual fund portfolio is probably the more rewarding strategy. "The decision shouldn't be purely based on tax. We've had real-life cases where we advised clients to invest in 54EC bonds when the gains were significant. But when the gains were marginal, we suggested paying the tax and deploying the funds elsewhere for better long-term outcomes," Chetanwala said.


News18
2 days ago
- News18
ITR Filing Last Date: New Deadline, July 23 Capital Gains Cut-Off, FY25 Slab Rates, All You Need To Know
Last Updated: The due date for filing ITRs for salaried individuals and HUFs not subject to audit has been extended till September 15, 2025, from July 31, 2025 earlier. ITR Filing Last Date: The ITR filing season 2025 is going on. This year, filing the income tax return is a bit complex for investors as capital gains needs to be bifurcated in accordance with the July 23, 2024, cut-off. Here's a detailed look at everything you need to know before filing your return, including deadlines, slab rates, capital gains rules, and other key tax amendments: What Is the Last Date to File ITR for FY2024-25? The due date for filing ITRs for salaried individuals and HUFs not subject to audit has been extended till September 15, 2025, from July 31, 2025 earlier. For businesses or professionals requiring audit, the due date is October 31, 2025. Why Is July 23, 2024, Important for Investors? July 23, 2024 marks a cut-off date for applying the new capital gains tax rules announced in Budget 2024. Any asset sold on or after July 23, 2024, will be taxed under the revised capital gains tax regime. Gains from assets sold before this date will be taxed under the old regime, with indexation and existing rates. This cut-off date is critical because taxpayers now must bifurcate capital gains in their ITRs based on this date. The Central Board of Direct Taxes (CBDT) has updated ITR forms to reflect this requirement. Capital Gains Tax: What Has Changed for FY2024-25? Budget 2024 introduced major structural changes in the taxation of both financial and non-financial assets. These changes are aimed at simplifying and harmonising the capital gains framework: New Rules Applicable from July 23, 2024: Long-Term Capital Gains (LTCG) will now be taxed at a flat 12.5% across all asset classes (including equity, real estate, gold), up from 10%. Short-Term Capital Gains (STCG) on assets like equities will be taxed at 20%, up from 15%. The LTCG exemption limit on equity-related instruments has been raised from Rs 1 lakh to Rs 1.25 lakh. Listed financial assets held for more than 12 months will now be treated as long-term assets. For Real Estate: LTCG tax on property sales has been reduced from 20% to 12.5%. However, the indexation benefit for properties purchased after April 1, 2001, was removed. After widespread backlash, the government allowed sellers of assets bought before July 23, 2024, to choose between old or new tax computation methods, including indexation. 'The logic of the budgetary proposal on capital gains is that the structure has to be simplified…and to treat all asset classes equally. [Now, after the amendment to the finance bill] tax on the sale of assets purchased before July 23, 2024, can be computed under the old scheme with indexation or the new scheme… and (property sellers can) pay lower tax," Finance Minister Nirmala Sitharaman had said on August 7, explaining the rationale behind the original decision as well as the 'rollback'. Income Tax Slabs for FY 2024-25 (New Regime) Standard deduction increased to Rs 75,000 (up from Rs 50,000). Rebate under Section 87A available for income up to Rs 7 lakh — no tax payable if total income is within this limit. Allows popular deductions like 80C, 80D, HRA, home loan interest (Sec 24b). HRA continues to be a significant factor in deciding whether to opt for the old regime. Boost in NPS Deductions for Private Employees Budget 2024 raised the deduction limit for employer contribution to corporate NPS from 10% to 14% of basic salary under the new regime for private sector employees. This matches the existing 14% benefit enjoyed by central and state government employees. Note: The deduction remains capped at 10% for private employees under the old regime. If you are an Indian employee working abroad or receiving foreign ESOPs or have foreign bank accounts, you are still required to report them in your ITR. But here's the relief: From FY2024-25, failure to report foreign financial assets worth up to Rs 20 lakh will not attract a penalty under the Black Money Act, which previously imposed fines up to Rs 10 lakh. 5 Key Tax Changes to Keep in Mind This Year 1. Revised new regime slabs: Lower tax outgo for many salaried taxpayers without exemptions. 2. Capital gains overhaul: LTCG @12.5%, STCG @20%, new exemption limits, and July 23 split. 3. Standard deduction up: Rs 75,000 under new regime—added benefit for salaried taxpayers. 4. Higher NPS deduction: 14% employer contribution deductible in new regime for private sector employees. top videos View all 5. Foreign asset disclosures: Low-value foreign assets now exempt from harsh penalties. Taxpayers this year need to be extra vigilant while preparing and filing ITRs. With multiple changes in tax slabs, capital gains rules, and disclosure requirements, understanding the impact of the July 23 cut-off and the choice of tax regime is critical. About the Author Business Desk A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover More Stay updated with all the latest business news, including market trends, stock updates, tax, IPO, banking finance, real estate, savings and investments. Get in-depth analysis, expert opinions, and real-time updates—only on News18. Also Download the News18 App to stay updated! tags : income tax return ITR filing view comments Location : New Delhi, India, India First Published: July 26, 2025, 12:17 IST News business » tax ITR Filing Last Date: New Deadline, July 23 Capital Gains Cut-Off, FY25 Slab Rates, All You Need To Know Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.