The Income-tax Act, 2025 has received the Hon’ble President’s assent on 21st Aug 2025 and it has been officially notified in the Gazatte on 22nd August, 2025.
What is The Income Tax Act 2025 ?
The Income Tax Act 2025 is a landmark reform replacing the six decades old Income Tax Act, 1961. The new Income Tax Act will be applicable from 1st April, 2026 governing taxation from the Financial Year 2026-27 onward. The new act aims to simplifying tax laws and making it more user friendly.
Structure of the New Income Tax Act 2025
- Income tax act 2025 is having 536 sections as compared to 800 sections in the Income tax act 1961.
- Chapters count is cut to 23 chapters only. Previously there were 47 chapters in the act.
- Tax Year replaces traditional “Assessment Year” concept.
- Retained Rs. 12 lakh annual basic exemption limit with revised tax slabs to benefit middle income taxpayers.
- Faceless assessments will become standard practice to increase transparency and reduce human interface and corruption.
Tax Rates and Rebates
- The Income tax act 2025 introduces the New Tax Regime under clause 202(1):
- ₹0 – ₹ 4 lakh – Nil
- ₹4 – ₹ 8 lakh – 5%
- ₹8 – ₹ 12 lakh -10%
- ₹12 – ₹16 lakh – 15%
- ₹16 -₹ 20 lakh – 20%
- ₹20 – ₹ 24 lakh – 25%
- Above ₹ 24 lakh- 30%
- Section 87A rebate – 100 % rebate or ₹ 60000 (whichever is lower) for resident individuals.
This is a short Overview of Income Tax Act 2025. In next article we will discuss New Act in detail.
