Income Tax Act 2025 PDF – New Income Tax Bill 2025 Highlights

The much-awaited Income Tax Act 2025 PDF has been released, introducing major reforms to modernize taxation. The new income tax bill 2025 highlights key structural changes, simplifications, and enhanced transparency. The bill was presented in Parliament on February 13, 2025, and is currently under review by a dedicated committee. Let’s explore the major changes and their impact.

Effective Date of the Income Tax Act 2025

A common question among taxpayers is when the Income Tax Act 2025 PDF will be applicable. The new tax law will take effect from April 1, 2026, meaning it will apply for the financial year 2026-27. Taxpayers should familiarize themselves with the new framework to ensure compliance.

Impact on CA, CS & CMA Students

For taxation exam aspirants, the transition period is as follows:

• Until March 31, 2026 – Exams will follow the Income Tax Act 1961.

• From April 1, 2027 – Exams will be based on the Income Tax Act 2025 PDF.

Objectives of the Income Tax Act 2025

The government aims to achieve three core objectives through the new income tax bill 2025 highlights:

1. Modernization – Aligning tax laws with global standards.

2. Simplification – Making tax provisions clearer and easier to understand.

3. Efficiency – Enhancing transparency and reducing tax disputes.

Major Highlights of the New Income Tax Bill 2025

1. Streamlined Tax Law Structure

The old tax law had 298 sections with over 800 provisions. The Income Tax Act 2025 PDF simplifies this by reducing it to 536 sections, eliminating redundancies.

2. Chapter Restructuring

Previously, there were 47 chapters. The new income tax bill 2025 highlights a more organized approach, reducing it to 23 chapters for better clarity.

3. Word & Page Count Reduction

• Old Act: 5.12 lakh words

• New Act: 2.6 lakh words (almost 50% reduction)

• Total pages: 622, making it 200 pages shorter

4. Introduction of Tax Year

The terms ‘Previous Year’ and ‘Assessment Year’ have been replaced with a single ‘Tax Year’ running from April 1 to March 31. The first tax year under the Income Tax Act 2025 PDF will be Tax Year 2026-27.

5. Retention of Old & New Tax Regimes

Contrary to speculation, both the old and new tax regimes remain. This flexibility allows taxpayers to choose their preferred structure.

6. Taxation of Virtual Digital Assets (VDA)

Cryptocurrencies, NFTs, and other digital assets are now classified as taxable. The Income Tax Act 2025 PDF ensures undisclosed income from these assets is accounted for.

7. Simplified Language & Litigation Reduction

To reduce tax disputes, the law uses simpler language, tables, and formulas while incorporating past judicial rulings.

8. No Changes in Tax Slabs

The tax slab structure remains unchanged from the Union Budget 2025. With applicable rebates, individuals earning INR 12 lakh will pay no tax.

9. Retention of Five Income Heads

The new income tax bill 2025 highlights the continuation of five categories:

1. Salary

2. House Property

3. Business/Profession

4. Capital Gains

5. Other Sources

10. Changes in Section Numbers

To improve navigation, section numbers have been modified:

• Salary Income: Sections 15-19 (previously 15-17)

• House Property: Sections 20-25 (previously 20-27)

• Business/Profession: Sections 26-66 (previously 28-44)

• Capital Gains: Sections 67-91 (previously 45-55)

• Other Sources: Sections 92-95 (previously 56-59)

Conclusion

The Income Tax Act 2025 PDF marks a significant shift in India’s tax system. By simplifying laws, reducing litigation, and improving transparency, it ensures a smoother tax compliance process for individuals and businesses. Download the Income Tax Act 2025 PDF to stay updated on all reforms and key provisions.