Top Points of Income Tax Act 2025 | PDF Download & Information

The Income Tax Act 2025 was formally tabled in Parliament on February 13, a key milestone in the tax reform journey of India. The much-awaited legislation assures an easier and clearer tax regime. Although most were looking forward to the law being rechristened as the Direct Tax Code, it keeps its old name but with a fresh twist as the Income Tax Act 2025.

With a review committee and a submission of the report in advance of the Monsoon Session, stakeholders such as taxpayers and students are keeping a keen eye on how these changes will be implemented. Let's take a look at the key highlights, implementation date, and how you can get the Income Tax Act 2025 PDF to learn more.

Applicability of the Income Tax Act 2025

One of the prime areas of concern is the timeline of implementation of the law. Income Tax Act 2025 will be effective from April 1, 2026. This implies that the first Financial Year to be governed by this new structure would be Financial Year 2026-27. This window period provides taxpayers sufficient time to adjust and familiarize themselves with the changes.

As far as students preparing for CA, CS, and CMA exams are concerned, the transition would be like this:

Tests up to and including March 31, 2026, will be governed by the 1961 Act.

Tests from April 1, 2027, will be governed by the Income Tax Act 2025.

Underlying Aims Behind the New Act

Clear objectives have been outlined by the government for introducing the Income Tax Act 2025:

Reform India's tax system based on international best practices.

Remove jargon in law and complexity that is unnecessary.

Simplify tax calculations for increased compliance and transparency.

These objectives are mirrored in a number of structural reforms and adjustments to the classic tax terrain.

Key Changes Under the Income Tax Act 2025

Let us look at the most significant changes that characterize this reform:

1. Less Sections, Greater Clarity

The previous Act had 298 sections, a large number of which consisted of several sub-sections. In contrast, the Income Tax Act 2025 has grouped provisions into 536 streamlined sections, eliminating duplications.

2. Reorganized Chapters

The chapter count has been reduced from 47 to merely 23, and this simplifies navigation and reference.

3. Less Word and Page Count

In the attempt to increase clarity:

Word count was reduced from 5.12 lakh to 2.6 lakh.

The overall page count now stands at 622, roughly 200 pages less than the previous one.

4. Easier Language and Structure

Sophisticated tax calculations are now simplified with the help of formulas and tables. This change enables taxpayers to have improved comprehension and less dependence on intermediaries.

5. Reducing Litigation Focus

Through the incorporation of previous court decisions and the removal of vague expressions, the Act hopes to decrease litigation between taxpayers and the tax authority.

Principles of Structural Changes in the New Act

6. Introduction of 'Tax Year'

The old notions of 'Previous Year' and 'Assessment Year' are substituted by the 'Tax Year', which runs from April 1 to March 31. The first period applicable will be Tax Year 2026-27.

7. Dual Tax Regime Remains

Unexpectedly, both the old and new tax regimes will remain in operation. Taxpayers can still opt according to their income structure and benefits.

8. Virtual Digital Assets Are Now Taxable

Digital assets such as cryptocurrencies and NFTs are now legally recognized as taxables. The Income Tax Act 2025 broadens the tax heads for assets to cover digital income to be reported correctly.

9. Slab Rates Remain the Same

According to the new budget, the slab rates do not change. Surprisingly, at a gross income of ₹12 lakh, the net tax payable can be NIL based on available rebates.

10. No Adjustment in Income Heads

The five historic heads of income are still in place:

Salary

House Property

Business/Profession

Capital Gains

Other Sources

11. New Section Numbers

To make the structure more logical, section numbers have been rearranged:

Salary: 15–19

House Property: 20–25

Business/Profession: 26–66

Capital Gains: 67–91

Other Sources: 92–95

Download the Income Tax Act 2025 PDF

Tax professionals, students, and those looking for detailed information can download the complete Income Tax Act 2025 PDF. The document gives thorough coverage of every provision, rule, and revision.

To remain updated and ahead of the game in tax planning or exam preparation, ensure you download the Income Tax Act 2025 PDF and start getting used to the updated format and fresh rules.