Income Tax Act 2025 PDF: Key Changes, Dates & Highlights

India has taken a major leap in tax reform with the introduction of the Income Tax Act 2025. Presented in Parliament on February 13, 2025, this new legislation aims to replace the decades-old Income Tax Act, 1961. With significant structural, linguistic, and procedural improvements, this act intends to simplify taxation for individuals and businesses alike. A dedicated committee will review the bill and submit its findings by the Monsoon Session, marking the beginning of a new tax era.

Before diving deep, if you're looking for a detailed breakdown, you can download the Income Tax Act 2025 PDF, which contains the full text, changes, and explanations.

When Will the Income Tax Act 2025 Be Applicable?

One of the most common queries is about its implementation. The Income Tax Act 2025 will come into force from April 1, 2026, meaning it will be applicable for Financial Year 2026–27 onward. Until then, the existing Income Tax Act, 1961, will remain in effect.

Moreover, students preparing for CA, CS, and CMA exams must stay updated. Examinations before March 31, 2027, will follow the current law, while those on or after April 1, 2027, will be based on the new act. To study in detail, it's advisable to refer to the Income Tax Act 2025 PDF directly.

Key Objectives Behind the Act

The government outlined three core goals behind this legal overhaul:

• Modernize the tax system with international alignment
  
  

• Simplify language and remove outdated concepts
  
  

• Streamline tax calculations for better transparency
  
  

By aiming for these goals, the government ensures the tax system is not only efficient but also easier to understand and less prone to disputes.

New Income Tax Bill 2025 Highlights: What’s Changed?

The New Income Tax Bill 2025 highlights several important changes. These updates have been introduced to make taxation more structured and taxpayer-friendly.

1. Fewer Sections, Greater Clarity

The old law had 298 sections, but in reality, with sub-sections, it crossed 800 provisions. The new act cuts it down to 536 well-defined sections, eliminating duplication.

2. Streamlined Chapter Structure

Instead of 47 fragmented chapters, the new law now has only 23 chapters, which makes navigating through the act significantly easier.

3. Reduced Word & Page Count

The Income Tax Act 2025 PDF is much shorter:

• Old Act: 5.12 lakh words
  
  

• New Act: 2.6 lakh words
  
  

• Also, it now spans 622 pages, nearly 200 pages fewer than before.
  
  

4. Clear Language & User-Friendly Layout

You’ll notice the use of tables, formulas, and plain English to explain tax calculations. This helps taxpayers quickly grasp even complex provisions.

5. Built-In Litigation Minimization

To reduce disputes, many past judicial decisions have been embedded in the law. This proactive step aims to provide clarity and reduce legal back-and-forth.

6. 'Tax Year' Replaces Old Terms

The traditional terms "Previous Year" and "Assessment Year" are now replaced with a single term — "Tax Year", running from April 1 to March 31.

Old and New Tax Regimes Continue

Despite speculation, the government has chosen not to remove the old tax regime. Taxpayers can still choose between the old and new regimes, offering flexibility based on income levels and deductions.

Digital Assets Now Taxable

Another key feature in the New Income Tax Bill 2025 highlights is the inclusion of Virtual Digital Assets (VDAs) like cryptocurrency and NFTs. Previously, assets like money, gold, and property were taxable. Now, digital assets will also fall under this category. To understand the specific tax implications, consult the Income Tax Act 2025 PDF.

Tax Slabs Remain the Same

The tax slab structure remains unchanged from what was declared in the Union Budget 2025. For example, individuals earning ₹12 lakh will still enjoy a zero tax liability due to applicable rebates.

Five Income Heads Retained

There’s no change in the fundamental income classification. The same five heads of income continue:

• Salary
  
  

• House Property
  
  

• Business or Profession
  
  

• Capital Gains
  
  

• Other Sources
  
  

However, section numbers have changed to bring more order:

• Salary Income: Sections 15–19
  
  

• House Property: Sections 20–25
  
  

• Business/Profession: Sections 26–66
  
  

• Capital Gains: Sections 67–91
  
  

• Other Sources: Sections 92–95
  
  

If you want a deeper look, the Income Tax Act 2025 PDF is the best reference document.