With an aim to simplify the tax process and provide relief to taxpayers, the Government of India has brought major changes in the Income Tax Act for the financial year 2025\u201326 (Assessment Year 2026\u201327). The Income Tax Bill 2025, which replaced the old Income Tax Act of 1961, has included some reforms. Let's see what they are<\/p>\n\n\n\n
Revised Slabs :<\/strong><\/p>\n\n\n\n These changes are aimed at increasing the disposable income of the people and stimulating economic growth.<\/p>\n\n\n\n The basic deduction limit under the new tax regime has been increased from \u20b93 lakh to \u20b94 lakh, providing relief to low-income earners by exempting them from tax.<\/p>\n\n\n\n Salaried individuals and pensioners can now claim a standard deduction of \u20b975,000 under the new tax regime. Earlier, it was \u20b950,000.<\/p>\n\n\n\n The rebate under Section 87A for taxpayers with income up to Rs 7 lakh has been increased from \u20b925,000 to \u20b960,000, effectively making their tax liability zero.<\/p>\n\n\n\n The new tax regime will now be the default option for taxpayers. However, individuals can opt for the old tax regime if they wish.<\/p>\n\n\n\n The Income Tax Bill, 2025 seeks to simplify tax laws by reducing the number of chapters from 52 to 23 and the number of pages from 823 to 622. This makes the law more concise and easier to understand.<\/p>\n\n\n\n In order to reduce the compliance burden on tax deductors and collectors, sections 206AB and 206CCA, which mandated higher TDS and TCS rates for non-filers, have been deleted.<\/p>\n\n\n\n The Direct Taxes Code, 2025 simplifies the rules for determining the residential status of an individual and reduces ambiguity and litigation.<\/p>\n\n\n\n The new code proposes uniform tax rates aimed at simplifying the corporate tax structure and making it easier to do business.<\/p>\n\n\n\n The traditional concepts of 'assessment year' and 'previous year' have been removed to simplify tax calculations and filings.<\/p>\n\n\n\n The Direct Tax Code 2025 introduces new methods for calculating capital gains with an aim to streamline and modernize taxation of investments.<\/p>\n\n\n\n Tax authorities have been given broad powers to access taxpayers' digital records, including emails, social media and cloud storage, during investigations.<\/p>\n\n\n\n Failure to link PAN with Aadhaar will result in suspension of dividend payouts. Therefore, it emphasizes the importance of complying with this law.<\/p>\n\n\n\n The new tax bill has removed unnecessary and obsolete provisions of the previous law with the aim of reducing litigation and increasing clarity.<\/p>\n\n\n\n The reforms promote digital compliance, focusing on online filings and communications to streamline processes and reduce paperwork.<\/p>\n\n\n\n The Income Tax Bill 2025 is a major change towards a more efficient and taxpayer-friendly system. Its significance is that by simplifying tax rules, adjusting slabs, and increasing digital compliance, it will make tax filing more accessible and easier for individuals and businesses alike.<\/p>","protected":false},"excerpt":{"rendered":" With an aim to simplify the tax process and provide relief to taxpayers, the Government of India has brought major changes in the Income Tax Act for the financial year 2025\u201326 (Assessment Year 2026\u201327). The Income Tax Bill 2025, which replaced the old Income Tax Act of 1961, has included some reforms. Let's see what they are<\/p>","protected":false},"author":9,"featured_media":5010,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[9],"tags":[159,235,236,234,91],"class_list":["post-5012","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-personal-finance","tag-business-updates","tag-income-tax-act-2025-that-will-affect-itr-2026","tag-income-tax-updates","tag-itr-2026","tag-personal-finance"],"yoast_head":"\n\n
Basic deduction limit increased<\/h2>\n\n\n\n
Enhanced standard deduction<\/h2>\n\n\n\n
Rebate under Section 87A increased<\/h2>\n\n\n\n
New tax regime made default<\/h2>\n\n\n\n
Simplification of tax laws<\/h2>\n\n\n\n
Sections 206AB and 206CCA deleted<\/h2>\n\n\n\n
Simplified residential status rules<\/h2>\n\n\n\n
Uniform Corporate Tax Rates<\/h2>\n\n\n\n
Elimination of concepts of 'assessment year' and 'previous year'<\/h2>\n\n\n\n
Capital Gains Tax Revised<\/h2>\n\n\n\n
Improved access to digital records<\/h2>\n\n\n\n
PAN-Aadhaar linking mandatory <\/h2>\n\n\n\n
Removal of obsolete provisions<\/h2>\n\n\n\n
Focus on digital compliance<\/h2>\n\n\n\n