Income Tax Act 2025 PDF: New Tax Bill Highlights & Changes
Income Tax Act 2025 PDF: New Tax Bill Highlights & Changes
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The much-anticipated Income Tax Act 2025 PDF was officially introduced in Parliament on February 13, 2025. A dedicated committee is now evaluating the bill and is expected to present its findings before the Monsoon Session. This new legislation aims to modernize and simplify India’s tax framework while enhancing efficiency.
Discover key changes in the Income Tax Act 2025 PDF, including major updates, implementation details, and new income tax bill 2025 highlights.
Implementation Date and Transition Timeline
Implementation Date and Transition Timeline
The Income Tax Act 2025 will take effect from April 1, 2026, marking the start of the financial year 2026-27 under this law. The transition schedule is particularly important for students preparing for taxation-related exams:
Exams before March 31, 2026, will follow the Income Tax Act, 1961.
Exams from April 1, 2027, onward will be based on the Income Tax Act 2025.
Key Objectives of the New Tax Law
Key Objectives of the New Tax Law
The government introduced the Income Tax Act 2025 PDF with three major objectives:
Aligning India’s tax policies with global best practices.
Simplifying tax laws with clear language and structured provisions.
Streamlining tax computations for better transparency and efficiency.
To accomplish these goals, several structural and procedural changes have been implemented in the new income tax bill 2025 highlights.
Major Highlights of the Income Tax Act 2025
Major Highlights of the Income Tax Act 2025
1. Streamlined Tax Structure
1. Streamlined Tax Structure
The older Income Tax Act had 298 sections, with numerous sub-provisions totaling over 800. The Income Tax Act 2025 PDF reduces this to 536 sections, eliminating redundant clauses and ensuring a more straightforward approach.
2. Chapter Restructuring for Better Understanding
2. Chapter Restructuring for Better Understanding
Previously, the tax law was divided into 47 chapters. However, the new income tax bill 2025 highlights reveal that these have been consolidated into 23 chapters, making it easier for taxpayers to comprehend.
3. Reduced Complexity and Improved Readability
3. Reduced Complexity and Improved Readability
To enhance clarity, the government has made substantial modifications:
Word count reduced from 5.12 lakh words to 2.6 lakh words.
The Income Tax Act 2025 PDF now consists of 622 pages, making it 200 pages shorter than the previous law.
4. Simplified Tax Language
4. Simplified Tax Language
Complex jargon has been replaced with clearer terms, tables, and formulas to aid taxpayers in understanding tax calculations without ambiguity.
5. Litigation Reduction Measures
5. Litigation Reduction Measures
A significant reform in the Income Tax Act 2025 PDF is the integration of past judicial rulings. This step minimizes disputes and ensures consistency in tax interpretation.
6. Introduction of ‘Tax Year’ Concept
6. Introduction of ‘Tax Year’ Concept
The traditional terms ‘Previous Year’ and ‘Assessment Year’ are now replaced by ‘Tax Year’, spanning from April 1 to March 31. The first tax year under this provision will be 2026-27.
7. Retaining Both Tax Regimes
7. Retaining Both Tax Regimes
Contrary to expectations, both the old and new tax regimes will continue under the Income Tax Act 2025 PDF, providing taxpayers with flexibility in choosing their preferred tax structure.
8. Taxation of Virtual Digital Assets (VDA)
8. Taxation of Virtual Digital Assets (VDA)
For the first time, Virtual Digital Assets (VDA), including cryptocurrencies and NFTs, are categorized as taxable assets. Previously, only traditional assets like cash, bullion, and jewelry were taxable. The Income Tax Act 2025 PDF elaborates on how digital assets will be taxed.
9. Unchanged Tax Slab Structure
9. Unchanged Tax Slab Structure
The new income tax bill 2025 highlights confirm that the tax slab structure remains unchanged from the Union Budget 2025. Notably, income up to INR 12 lakh will have NIL tax due to applicable rebates.
10. Retaining the Five Income Categories
10. Retaining the Five Income Categories
The Income Tax Act 2025 PDF retains the five traditional heads of income:
Salary
House Property
Business/Profession
Capital Gains
Other Sources
11. Revised Section Numbers for Easy Navigation
11. Revised Section Numbers for Easy Navigation
To enhance organization, section numbers have been restructured:
Salary Income: Sections 15-17 → Now 15-19
House Property Income: Sections 20-27 → Now 20-25
Business/Profession Income: Sections 28-44 → Now 26-66
Capital Gains: Sections 45-55 → Now 67-91
Other Sources: Sections 56-59 → Now 92-95
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