The Income Tax Bill, 2025 introduces several key changes compared to the Income Tax Act, 1961. Below are some of the major differences and amendments:
1. Structural Changes
- New Terminology: Introduction of “tax year” in place of “previous year.”
- Reorganization of Sections: The 2025 Bill consolidates and streamlines various provisions to make them more structured.
2. Changes in Income Tax Computation
- Updated Income Tax Slabs: The new bill proposes revised tax slabs (details need verification from the full text).
- New Tax Regime: Specific provisions for individuals, Hindu Undivided Families (HUFs), and companies.
3. Deduction & Exemption Changes
- New Deductions Introduced:
- Deduction for purchases of electric vehicles.
- Deduction for contributions to the Agnipath Scheme.
- Revised Deduction Limits:
- Employer’s contribution to the pension scheme of the Central Government.
- Changes in Political Contributions:
- Revised provisions for contributions made to political parties.
4. Taxation of Capital Gains
- Changes in Computation:
- Introduction of Market Linked Debentures in capital gains taxation.
- Revised full value of consideration rules for transfers.
- Exemptions for shifting of industrial undertakings have been modified.
5. Business Taxation Changes
- New Deduction Provisions:
- Expanded deductions for businesses engaged in renewable energy and sustainability.
- Amortization provisions revised for specific business expenditures.
- Foreign Exchange Adjustments:
- Updated rules for capitalizing foreign exchange fluctuations.
6. Anti-Avoidance & Tax Compliance
- General Anti-Avoidance Rule (GAAR) Enhancements:
- More stringent provisions to prevent impermissible avoidance arrangements.
- Faceless Assessment & Jurisdiction:
- Expanded use of faceless proceedings in assessments and appeals.
- Enhanced Powers for Tax Authorities:
- New powers for tax authorities to requisition information.
7. Special Provisions for Non-Residents & Foreign Companies
- Changes in Transfer Pricing & Foreign Transactions:
- Enhanced definition of associated enterprises.
- Revised Advance Pricing Agreement (APA) provisions.
- Non-Resident Taxation:
- Updated provisions for taxation of foreign dividends, royalty, and technical service fees.
8. New Compliance & Filing Requirements
- Updated Tax Audit Rules:
- Electronic modes of payment to be encouraged.
- Strict penalties for non-maintenance of books of accounts.
- Revised Tax Deducted at Source (TDS) & Tax Collected at Source (TCS) Provisions.
These are some of the key amendments in the Income Tax Bill, 2025 compared to the Income Tax Act, 1961. Let me know if you need a more detailed analysis on any specific provision
Income Tax Bill, 2025 PDF
Chapter I – Preliminary
| Section Number | Section Title |
|---|---|
| 1 | Short title, extent, and commencement |
| 2 | Definitions |
| 3 | Definition of “tax year” |
Chapter II – Basis of Charge
| Section Number | Section Title |
|---|---|
| 4 | Charge of income-tax |
| 5 | Scope of total income |
| 6 | Residence in India |
| 7 | Income deemed to be received |
| 8 | Income on receipt of capital asset or stock-in-trade by specified person from specified entity |
| 9 | Income deemed to accrue or arise in India |
| 10 | Apportionment of income between spouses governed by Portuguese Civil Code |
Chapter III – Incomes which do not form part of total income
| Section Number | Section Title |
|---|---|
| 11 | Incomes not included in total income |
| 12 | Incomes not included in total income of political parties and electoral trusts |
Chapter IV – Computation of Total Income
| Section Number | Section Title |
|---|---|
| 13 | Heads of income |
| 14 | Income not forming part of total income and expenditure in relation to such income |
Salaries
| Section Number | Section Title |
|---|---|
| 15 | Salaries |
| 16 | Income from salary |
| 17 | Perquisite |
| 18 | Profits in lieu of salary |
| 19 | Deductions from salaries |
Income from House Property
| Section Number | Section Title |
|---|---|
| 20 | Income from house property |
| 21 | Determination of annual value |
| 22 | Deductions from income from house property |
| 23 | Arrears of rent and unrealized rent received subsequently |
| 24 | Property owned by co-owners |
| 25 | Interpretation |
Profits and Gains of Business or Profession
| Section Number | Section Title |
|---|---|
| 26 | Income under head “Profits and Gains of Business or Profession” |
| 27 | Manner of computing profits and gains of business or profession |
| 28 | Rent, rates, taxes, repairs, and insurance |
| 29 | Deductions related to employee welfare |
| 30 | Deduction on certain premiums |
| 31 | Deduction for bad debt and provision for bad and doubtful debt |
| 32 | Other deductions |
| 33 | Deduction for depreciation |
| 34 | General conditions for allowable deductions |
Chapter V – Income of Other Persons, Included in Total Income of Assessee
| Section Number | Section Title |
|---|---|
| 96 | Transfer of income without transfer of assets |
| 97 | Chargeability of income in transfer of assets |
| 98 | “Transfer” and “revocable transfer” defined |
| 99 | Income of individual to include income of spouse, minor child, etc. |
| 100 | Liability of person in respect of income included in income of another person |
Chapter VI – Aggregation of Income
| Section Number | Section Title |
|---|---|
| 101 | Total income |
| 102 | Unexplained credits |
| 103 | Unexplained investment |
| 104 | Unexplained asset |
| 105 | Unexplained expenditure |
| 106 | Amount borrowed or repaid through negotiable instrument, hundi, etc. |
| 107 | Charge of tax |
Chapter VII – Set Off, or Carry Forward and Set Off of Losses
| Section Number | Section Title |
|---|---|
| 108 | Set off of losses under the same head of income |
| 109 | Set off of losses under any other head of income |
| 110 | Carry forward and set off of loss from house property |
| 111 | Carry forward and set off of loss from capital gains |
| 112 | Carry forward and set off of business loss |
| 113 | Set off and carry forward of losses from speculation business |
| 114 | Set off and carry forward of losses from specified business |
| 115 | Set off and carry forward of losses from specified activity |
| 116 | Treatment of accumulated losses and unabsorbed depreciation in amalgamation or demerger, etc. |
| 117 | Treatment of accumulated losses and unabsorbed depreciation in scheme of amalgamation in certain cases |
| 118 | Carry forward and set off of losses and unabsorbed depreciation in business reorganisation of co-operative banks |
| 119 | Carry forward and set off of losses not permissible in certain cases |
| 120 | No set off of losses against undisclosed income consequent to search, requisition and survey |
| 121 | Submission of return for losses |
Chapter VIII – Deductions to be Made in Computing Total Income
General
| Section Number | Section Title |
|---|---|
| 122 | Deductions to be made in computing total income |
Deductions in respect of certain payments
| Section Number | Section Title |
|---|---|
| 123 | Deduction for life insurance premia, deferred annuity, contributions to provident fund, etc. |
| 124 | Deduction in respect of employer contribution to pension scheme of Central Government |
| 125 | Deduction in respect of contribution to Agnipath Scheme |
| 126 | Deduction in respect of health insurance premia |
| 127 | Deduction in respect of maintenance including medical treatment of a dependent who is a person with disability |
| 128 | Deduction in respect of medical treatment, etc. |
| 129 | Deduction in respect of interest on loan taken for higher education |
| 130 | Deduction in respect of interest on loan taken for residential house property |
| 131 | Deduction in respect of interest on loan taken for certain house property |
| 132 | Deduction in respect of purchase of electric vehicle |
| 133 | Deduction in respect of donations to certain funds, charitable institutions, etc. |
| 134 | Deduction in respect of rents paid |
| 135 | Deduction in respect of certain donations for scientific research or rural development |
| 136 | Deduction in respect of contributions given by companies to political parties |
| 137 | Deduction in respect of contributions given by any person to political parties |
Deductions in respect of certain incomes
| Section Number | Section Title |
|---|---|
| 138 | Deductions in respect of profits and gains from industrial undertakings or enterprises engaged in infrastructure development, etc. |
| 139 | Deductions in respect of profits and gains by an undertaking or enterprise engaged in development of Special Economic Zone |
| 140 | Special provision in respect of specified business |
| 141 | Deduction in respect of profits and gains from certain industrial undertakings |
| 142 | Deductions in respect of profits and gains from housing projects |
| 143 | Special provisions in respect of certain undertakings in North-Eastern States |
| 144 | Special provisions in respect of newly established Units in Special Economic Zones |
| 145 | Deduction for businesses engaged in collecting and processing of bio-degradable waste |
| 146 | Deduction in respect of additional employee cost |
| 147 | Deductions for income of Offshore Banking Units and Units of International Financial Services Centre |
| 148 | Deduction in respect of certain inter-corporate dividends |
| 149 | Deduction in respect of income of co-operative societies |
| 150 | Deduction in respect of certain income of Producer Companies |
| 151 | Deduction in respect of royalty income, etc., of authors of certain books other than text-books |
| 152 | Deduction in respect of royalty on patents |
Deductions in respect of other incomes
| Section Number | Section Title |
|---|---|
| 153 | Deduction for interest on deposits |
Other deductions
| Section Number | Section Title |
|---|---|
| 154 | Deduction in case of a person with disability |
Chapter IX – Rebates and Reliefs
Rebates and reliefs
| Section Number | Section Title |
|---|---|
| 155 | Rebate to be allowed in computing income-tax |
| 156 | Rebate of income-tax in case of certain individuals |
| 157 | Relief when salary, etc., is paid in arrears or in advance |
| 158 | Relief from taxation in income from retirement benefit account maintained in a notified country |
Double taxation relief
| Section Number | Section Title |
|---|---|
| 159 | Agreement with foreign countries or specified territories and adoption by Central Government of agreement between specified associations for double taxation relief |
| 160 | Countries with which no agreement exists |
Chapter X – Special Provisions Relating to Avoidance of Tax
| Section Number | Section Title |
|---|---|
| 161 | Computation of income from international transaction and specified domestic transaction having regard to arm’s length price |
| 162 | Meaning of associated enterprise |
| 163 | Meaning of international transaction |
| 164 | Meaning of specified domestic transaction |
| 165 | Determination of arm’s length price |
| 166 | Reference to Transfer Pricing Officer |
| 167 | Power of Board to make safe harbour rules |
| 168 | Advance pricing agreement |
| 169 | Effect to advance pricing agreement |
| 170 | Secondary adjustment in certain cases |
| 171 | Maintenance, keeping and furnishing of information and document by certain persons |
| 172 | Report from an accountant to be furnished by persons entering into international transaction or specified domestic transaction |
| 173 | Definitions of certain terms relevant to determination of arm’s length price, etc. |
| 174 | Avoidance of income-tax by transactions resulting in transfer of income to non-residents |
| 175 | Avoidance of tax by certain transactions in securities |
| 176 | Special measures in respect of transactions with persons located in notified jurisdictional area |
| 177 | Limitation on interest deduction in certain cases |
Income Tax Bill, 2025 – Sections Table
Chapter XI – General Anti-Avoidance Rule
| Section Number | Section Title |
|---|---|
| 178 | Applicability of General Anti-Avoidance Rule |
| 179 | Impermissible avoidance arrangement |
| 180 | Arrangement to lack commercial substance |
| 181 | Consequences of impermissible avoidance arrangement |
| 182 | Treatment of connected person and accommodating party |
| 183 | Application of this Chapter |
| 184 | Interpretation |
Chapter XII – Mode of Payment in Certain Cases, etc.
| Section Number | Section Title |
|---|---|
| 185 | Mode of taking or accepting certain loans, deposits, and specified sum |
| 186 | Mode of undertaking transactions |
| 187 | Acceptance of payment through prescribed electronic modes |
| 188 | Mode of repayment of certain loans or deposits |
| 189 | Interpretation |
Chapter XIII – Determination of Tax in Special Cases
Determination of tax in certain special cases
| Section Number | Section Title |
|---|---|
| 190 | Determination of tax where total income includes income on which no tax is payable |
| 191 | Tax on accumulated balance of recognised provident fund |
| 192 | Tax in case of block assessment of search cases |
| 193 | Tax on income from Global Depository Receipts purchased in foreign currency or capital gains arising from their transfer |
| 194 | Tax on certain incomes |
| 195 | Tax on income referred to in section 102 or 103 or 104 or 105 or 106 |
Special provisions relating to tax on capital gains
| Section Number | Section Title |
|---|---|
| 196 | Tax on short-term capital gains in certain cases |
| 197 | Tax on long-term capital gains |
| 198 | Tax on long-term capital gains in certain cases |
New tax regime
| Section Number | Section Title |
|---|---|
| 199 | Tax on income of certain manufacturing domestic companies |
| 200 | Tax on income of certain domestic companies |
| 201 | Tax on income of new manufacturing domestic companies |
| 202 | New tax regime for individuals, Hindu undivided family, and others |
| 203 | Tax on income of certain resident co-operative societies |
| 204 | Tax on income of certain new manufacturing co-operative societies |
| 205 | Conditions for tax on income of certain companies and cooperative societies |
Special provisions relating to minimum alternate tax and alternate minimum tax
| Section Number | Section Title |
|---|---|
| 206 | Special provision for minimum alternate tax and alternate minimum tax |
Chapter XIV – Tax Administration
Authorities, jurisdiction, and functions
| Section Number | Section Title |
|---|---|
| 236 | Income-tax authorities |
| 237 | Appointment of income-tax authorities |
| 238 | Control of income-tax authorities |
| 239 | Instructions to subordinate authorities |
| 240 | Taxpayer’s Charter |
| 241 | Jurisdiction of income-tax authorities |
| 242 | Jurisdiction of Assessing Officers |
| 243 | Power to transfer cases |
| 244 | Change of incumbent of an office |
| 245 | Faceless jurisdiction of income-tax authorities |
Powers
| Section Number | Section Title |
|---|---|
| 246 | Power regarding discovery, production of evidence, etc. |
| 247 | Search and seizure |
| 248 | Powers to requisition |
| 249 | Reasons not to be disclosed |
| 250 | Application of seized or requisitioned assets |
| 251 | Copying, extraction, retention, and release of books of account and documents seized or requisitioned |
| 252 | Power to call for information |
| 253 | Powers of survey |
| 254 | Power to collect certain information |
| 255 | Power to inspect registers of companies |
| 256 | Power of competent authority |
| 257 | Proceedings before income-tax authorities to be judicial proceedings |
| 258 | Disclosure of information relating to assessees |
| 259 | Power to call for information by prescribed income-tax authority |
| 260 | Faceless collection of information |
| 261 | Interpretation |
Chapter XV – Return of Income
Allotment of Permanent Account Number
| Section Number | Section Title |
|---|---|
| 262 | Permanent Account Number |
Filing of return of income and processing
| Section Number | Section Title |
|---|---|
| 263 | Return of income |
| 264 | Scheme for submission of returns through tax return preparers |
| 265 | Return by whom to be verified |
| 266 | Self-assessment |
| 267 | Tax on updated return |
Income Tax Bill, 2025 – Sections Table
Chapter XVI – Procedure for Assessment
Procedure for assessment
| Section Number | Section Title |
|---|---|
| 268 | Inquiry before assessment |
| 269 | Estimation of value of assets by Valuation Officer |
| 270 | Assessment |
| 271 | Best judgment assessment |
| 272 | Power of Joint Commissioner to issue directions in certain cases |
| 273 | Faceless Assessment |
| 274 | Reference to Principal Commissioner or Commissioner in certain cases |
| 275 | Reference to Dispute Resolution Panel |
| 276 | Method of accounting |
| 277 | Method of accounting in certain cases |
| 278 | Taxability of certain income |
| 279 | Income escaping assessment |
| 280 | Issue of notice |
| 281 | Procedure before issuance of notice under section 280 |
| 282 | Time limit for notices under sections 280 and 281 |
| 283 | Provision for cases where assessment is in pursuance of an order on appeal, etc. |
| 284 | Sanction for issue of notice |
| 285 | Other provisions |
| 286 | Time limit for completion of assessment, reassessment, and recomputation |
| 287 | Rectification of mistake |
| 288 | Other amendments |
| 289 | Notice of demand |
| 290 | Modification and revision of notice in certain cases |
| 291 | Intimation of loss |
Special procedure for assessment of search cases
| Section Number | Section Title |
|---|---|
| 292 | Assessment of income pertaining to the block period |
| 293 | Computation of total income of block period |
| 294 | Procedure for block assessment |
| 295 | Undisclosed income of any other person |
| 296 | Time-limit for completion of block assessment |
| 297 | Certain interests and penalties not to be levied or imposed |
| 298 | Levy of interest and penalty in certain cases |
| 299 | Authority competent to make assessment of block period |
| 300 | Application of other provisions of Act |
| 301 | Interpretation |
Chapter XVII – Special Provisions Relating to Certain Persons
Association of persons, firm, Hindu undivided family, etc.
Legal representatives
| Section Number | Section Title |
|---|---|
| 302 | Legal representative |
Representative assesses—General provisions
| Section Number | Section Title |
|---|---|
| 303 | Representative assessee |
| 304 | Liability of representative assessee |
| 305 | Right of representative assessee to recover tax paid |
Representative assesses—Special cases
| Section Number | Section Title |
|---|---|
| 306 | Who may be regarded as agent |
| 307 | Charge of tax where share of beneficiaries unknown |
| 308 | Charge of tax in case of oral trust |
Assessment of firms
| Section Number | Section Title |
|---|---|
| 324 | Charge of tax in case of a firm |
| 325 | Assessment as a firm |
| 326 | Assessment when section 325 not complied with |
Change in constitution, succession, and dissolution
| Section Number | Section Title |
|---|---|
| 327 | Change in constitution of a firm |
| 328 | Succession of one firm by another firm |
| 329 | Joint and several liability of partners for tax payable by firm |
| 330 | Firm dissolved or business discontinued |
Chapter XVIII – Appeals, Revision, and Alternate Dispute Resolutions
Appeals
Appeals to Joint Commissioner (Appeals) and Commissioner (Appeals)
| Section Number | Section Title |
|---|---|
| 356 | Appealable orders before Joint Commissioner (Appeals) |
| 357 | Appealable orders before Commissioner (Appeals) |
| 358 | Form of appeal and limitation |
| 359 | Procedure in appeal |
| 360 | Powers of Joint Commissioner (Appeals) or Commissioner (Appeals) |
Appeals to Appellate Tribunal
| Section Number | Section Title |
|---|---|
| 361 | Appellate Tribunal |
| 362 | Appeals to Appellate Tribunal |
| 363 | Orders of Appellate Tribunal |
| 364 | Procedure of Appellate Tribunal |
Chapter XIX – Collection and Recovery of Tax
General
| Section Number | Section Title |
|---|---|
| 390 | Deduction or collection at source and advance payment |
| 391 | Direct payment |
Deduction and collection at source
| Section Number | Section Title |
|---|---|
| 392 | Salary and accumulated balance due to an employee |
| 393 | Tax to be deducted at source |
| 394 | Collection of tax at source |
Chapter XX – Refunds
| Section Number | Section Title |
|---|---|
| 431 | Refunds |
| 432 | Person entitled to claim refund in certain special cases |
| 433 | Form of claim for refund and limitation |
| 434 | Refund for denying liability to deduct tax in certain cases |
| 435 | Refund on appeal, etc. |
| 436 | Correctness of assessment not to be questioned |
| 437 | Interest on refunds |
| 438 | Set off and withholding of refunds in certain cases |
Chapter XXI – Penalties
| Section Number | Section Title |
|---|---|
| 439 | Penalty for under-reporting and misreporting of income |
| 440 | Immunity from imposition of penalty, etc. |
| 441 | Failure to keep, maintain, or retain books of account, documents, etc. |
| 442 | Penalty for failure to keep and maintain information and document, etc., in respect of certain transactions |
| 443 | Penalty in respect of certain income |
Chapter XXII – Offences and Prosecution
| Section Number | Section Title |
|---|---|
| 473 | Contravention of order made under section 247 |
| 474 | Failure to comply with section 247(1)(b)(ii) |
| 475 | Removal, concealment, transfer, or delivery of property to prevent tax recovery |
| 476 | Failure to pay tax to credit of Central Government under Chapter XIX-B |
| 477 | Failure to pay tax collected at source |
Chapter XXIII – Miscellaneous
| Section Number | Section Title |
|---|---|
| 499 | Certain transfers to be void |
| 500 | Provisional attachment to protect revenue in certain cases |
| 501 | Service of notice, generally |
| 502 | Authentication of notices and other documents |
Chapter XXIV – Schedules
| Section Number | Section Title |
|---|---|
| Schedule I | Tax rates and tax slabs |
| Schedule II | Exemptions and deductions |
| Schedule III | Special allowances |
| Schedule IV | Computation methods |
| Schedule V | Rules for foreign income |
| Schedule VI | Treatment of capital gains |
| Schedule VII | Income from special economic zones |
| Schedule VIII | Rules for non-profit organizations |
| Schedule IX | Income of cooperative societies |
| Schedule X | Agricultural income rules |
| Schedule XI | Guidelines for depreciation |
| Schedule XII | Provisions for investment funds |
| Schedule XIII | International taxation provisions |
| Schedule XIV | Transitional provisions |
| Schedule XV | Miscellaneous exemptions |
| Schedule XVI | Guidelines for tax administration |
