New Income Tax Bill 2025 nearly doubles existing sections of 1961 Act. Download copy of Bill and read FAQs on New Income Tax Bill 2025
Union Finance Minister, in her Budget 2025 speech has informed the proposal to introduce the new Income-Tax Bill/Code. The new Income Tax Act 2025 shall come into force from 1st April 2025.
The New Income Tax Bill 2025 (24 of 2025) is expected to aim at simplifying the existing income tax provisions and make it less complicated. Although the number of Chapters in New Income Tax Bill 2025 remains 23 as in the existing Income Tax Act 1961, the number of sections in the new Bill has increased to 536 from existing 298 sections in the 1961 Act.
It remains a question if the proposed new Income Tax Act 2025 actually simplifies the existing Act of 1961, though the Press Release issued by the CBDT states that the New Bill is substantially less in volume in terms of number of sections and words. The number of chapters, sections stated to be in 1961 Act also seems to be not correct.
Assessment Year – The concept of Assessment Year has been done away and replaced by “tax year” which has been defined to be the twelve months period of the financial year commencing on the 1st April.
Heads of Income – There is no change in the head of income and they shall continue to be five i.e. (a) Salaries; (b) Income from house property; (c) Profits and gains of business or profession; (d) Capital gains; and (e) Income from other sources.
Partners Remuneration – Increase in the maximum limit of remuneration payable to partners of a firm. As per new provisions of section 35, on the first six lakh rupees of the book profit or in case of a loss, remuneration allowable shall be three lakh rupees or 90% of the book profit, whichever is higher. There is no change on the balance of the book profit which remains the same at the rate of 60%.
Section 44AD, 44AE AND 44ADA replaced by new section 58.
Tax Audit – New Section 63. No changes proposed in threshold of turnover or other governing provisions.
Tax Audit to be done by Chartered Accountants only. Accountant under section 515 has been defined to means a chartered accountant with certificate of practice.
Deduction u/s Section 80C – Section 123 replaces section 80C. Limit of deduction remains at Rs. 1.50 lakhs
Deduction of interest income from bank – Section 80TTB rechristened as Section 153. No change has been made in eligibility or amount of deduction allowable.
Rebate under section 87A is now covered under section 156. No change as compared to the Income Tax Act, 1961.
Relief u/s 80E for arrear of salary etc. now covered under section 157. No change as compared to the Income Tax Act, 1961.
New Tax Regime shall be governed by section 202 in place of existing section 115BAC
Provisions related to search and seizure shall be covered by new section 247 in place of existing section 132. Provisions have been amended to include electronic record on computer systems, any information stored in an electronic media, computer systems or virtual digital space.
Permanent Account No – New section is 262. No changes in the obligation/requirement of applying PAN.
No change in due dates for filing return of income / belated return. New section 263 proposed for filing return of income and processing.
Processing of Return – New Section 270. Section 143 has been substituted. Adjustment to income on account of income appearing in Form 26AS or Form 16A/ Form 16 and not included in income removed from the list of adjustments to be made.
Re-assessment – New section 279 – 301. Income escaping assessment to inter alia include any finding or direction contained in an order passed by any authority, Tribunal or court in any proceeding under Income Tax Act by way of appeal, reference or revision, or by a Court in any proceeding under any other law. Section 148 substituted by section 280. Section 148A substituted by section 281. Time limit for issue of notice u/s 280 increased from three years and three months to four years and three months from the end of the relevant tax year. Similarly, time limit for issue of notice u/s 281 increased form existing three years to four years have elapsed from the end of the relevant tax year. Also, in case of income escaping assessment is Rs. 50 lakhs or more, the time limits have been increased to six years in both section 280 and section 281.
Charitable Institutions shall be governed by provisions contained in section 332 to 355.
Provisions regarding Tax Deducted at Source – Under New Income Tax Bill 2025, various TDS provisions (other than salary) has been clubbed under one section i.e. section 393.
Collection of Tax at Source – Section 394 contains provisions for TCS. No significant changes proposed.
Interest for delay in furnishing of return and default/delay in advance tax – Section 234A, 234B and 234C have been replaced by section 423, 424 and 425 respectively. No changes have been proposed.
Late Fees for delay in furnishing return of income TDS/TCS Statements, Aadhaar Linking – New Section 427, 428 and 430. No changes proposed.
Penalty for misreporting/under-reporting and Immunity therefrom. New sections 439 and Section 440. No changes have been proposed in new Act.
Penalty for Tax audit failure – Section 446. No changes proposed.
Prosecution for payment of TDS/TCS, wilful attempt to evade tax and non furnishing of return of income – Section 476, 477, 478 and 479. No changes are proposed in minimum or maximum term of imprisonment.
Carry forward of losses under existing 1961 Act to continue in new 2025 Act.
Download copy of New Income Tax Bill 2025 Click Here >>
General FAQs on Income Tax Bill 2025 Click Here >>
FAQs on Income Tax Bill 2025 Click Here >>
Section-wise comparison with 1961 Act Click Here >>
- ITR-1 Sahaj and ITR-4 Sugam has been notified for AY 2025-26
- SC upheld constitutional validity to section 34, 47 & 58 of Consumer Protection Act 2019
- Appointment of internal auditor in GCE, Keonjhar for FYs 2009-10 to 2023-24
- Empanelment of Stock & Receivable Auditors in State Bank Of India, Thiruvananthapuram.
- If a contribution is not voluntary, it cannot be taxed as income u/s 11 r.w.s. 12(1) – ITAT
