A short overview of the key provision of the New Income Tax Bill 2025:

The New Income Tax Bill – 2025 is like old wine in a new bottle. Except for simplification of words and sentences, nothing has been done much. There are no structural reforms or paradigm shifts that have been carried out in the new law.

1.  They have made some cosmetic changes like removing the concept of PY & AY with a new Concept “TAX YEAR”.

2.  The Number of sections is now 536 instead of 298. Overall number of sections reduced.However, one may note that the actual number of sections in the ITA1961 is around 550, due to capital letter sections like 80C, 80D, 234A, 234B etc. So overall, the number of sections are not reduced by much.

3.  The new income tax law is referring to “Schedule” for various purposes like investment of trust funds as provided earlier in section 11(5) is mentioned in one schedule, exempt income as contained in section 10 is now having a separate schedule, etc.

4.  The proposed New Law will be applicable from FY 2026-27.

5.  Five heads of Income remain the same.

6.  Exemptions u/s 10 have been shifted to a separate schedule.

7.  TDS provisions are simplified to some extent which was already done in the last 2 Finance Act.

8.  Chapter VI-A has almost remained the same though the sections are renumbered and obsolete provision has been taken away. Even Profit linked deductions are the same which was supposed to be sunset.It can be said that section 80C has been renumbered as section 123.

9.  Sector-wise deductions for business remain the same.

10.  Various proceedings like assessment, appeal, revision, drp, rectification etc remain unchanged.

11.  Daily & Constituency Allowances” To Mp, Mla’s Is Still Exempt.

12.  Exemption to Political Party “continues”.

13.  New tax audit limit has been provided in the new law which is Rs. 5 Cr in place of Rs. 1 Cr or 2 Cr or Rs. 3 Cr. Similarly, if the cash turnover is less than 5% then the tax audit limit is Rs. 25 Cr. For professionals earlier covered by section 44AD, the tax audit limit is Rs. 1 Cr.

14.  The rate of 8% or 6% rate and 50% for professionals under the presumptive scheme of taxation has not been altered..

The copy of the Comparative Chart is as under:

Comparision of New Income tax Bill with existing Income Tax Act 1961