๐Ÿ“œ Income Tax Bill 2025 vs Income Tax Act 1961: A 64-Year Overhaul

 ๐Ÿ“œ Income Tax Bill 2025 vs Income Tax Act 1961: A 64-Year Overhaul

India’s direct tax law just got its biggest upgrade in six decades. Finance Minister Nirmala Sitharaman tabled the Income Tax Bill, 2025, replacing the bulky, amendment-ridden Income Tax Act, 1961.


๐Ÿ”‘ What’s Changed?

  • Simplified Structure: Sections cut from 819 → 536, chapters from 47 → 23. Archaic language scrapped, rules consolidated.

  • New Tax Slabs: Basic exemption raised to ₹4 lakh. Zero tax on incomes up to ₹12 lakh (after rebate). Gradual slabs up to 30%.

  • Compliance Relief: Refunds allowed even for late returns. Clearer TDS/TCS rules. Penalties relaxed for minor defaults.

  • Digital Enforcement: Tax department gets stronger surveillance rights to track evasion—access to accounts, investments, even digital records.

  • Targeted Deductions: Standard deduction, housing loan interest, commuted pensions, inter-corporate dividend deduction restored/clarified.

๐Ÿ‘ฅ Who Benefits?

  • Salaried Class: Higher exemptions, standard deduction intact, late return refunds possible.

  • Pensioners: Parity on commuted pension exemptions and UPS/NPS deductions.

  • MSMEs: Harmonized definitions, loss carry-forward clarity, nil-TDS certificates.

  • Investors & Startups: No change in incentives; inter-corporate dividend deduction revived.

⚖️ The Trade-Off

  • ✅ Clearer, shorter, business-friendly law.

  • ✅ Relief for middle-class taxpayers.

  • ⚠️ Wider surveillance powers may raise privacy concerns.

  • ⚠️ Revenue impact depends on compliance success.

๐Ÿš€ Why It Matters

The 1961 Act had 4,000+ amendments and 5 lakh words, making compliance a maze. The new Bill—50% shorter—promises clarity, fairness, and ease of doing business. If executed well, it could reduce disputes, boost investment, and modernize India’s tax ecosystem.

๐Ÿ‘‰ In short: A leaner law, lighter compliance, but heavier eyes on evasion.

#IncomeTaxBill2025 #TaxReform #DirectTaxes #EaseOfDoingBusiness #FinanceIndia #TaxSimplification

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