The Income Tax Act 2025 received the assent of the President on the 21st August, 2025 and has been notified in the official Gazette
The Income Tax Act 2025 contains 536 sections, organized into 23 chapters, with 16 schedules. It was stated by the Finance Minister that the new Act of 2025 is significantly reduced in volume compared to the previous Income tax Act 1961. Only the time will tell how meaningful is the introduction of Income Tax Act 1925 and if it brings simplicity and ease of use or creates more confusion.
A comparative analysis of both the Act is as under:
| 2025 Act | 1961 Act | |
| Total number of Chapters | XXIII | XXIII |
| Total number of Sections | 298 | 536 |
| Total Number of Schedules | XIV | XVI |
The Income-tax Act, 2025 has been stated to be a reorganisation and simplification of 1961 Act. The Act:
(a) Consolidates and streamlines the legislation—shortening it drastically while retaining necessary substance.
(b) Introduces a unified “tax year” concept, replacing concept of previous vs. assessment years.
(c) Simplifies compliance and administration—through consolidated provisions (like TDS), faceless assessments, and more transparent procedures.
(d) Maintains key tax provisions , such as the ₹12 lakh exemption and dual tax regime options, continuing to balance reform with taxpayer convenience.
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