All You Need To Know About The New Income-Tax Bill: Big Changes, New Vs Old Regime And Penalties

The government is set to introduce the Income-Tax Bill, 2025, a comprehensive revamp of India’s tax laws, replacing the Income-Tax Act, 1961. The new legislation, scheduled to come into effect from April 1, 2026, aims to simplify tax structures, enhance compliance, and curb tax evasion.The Bill introduces 16 schedules and 23 chapters, compared to 14 schedules in the existing law, restructuring sections for improved clarity.It defines taxable income, residency status, and income sources, covering salaries, business profits, capital gains, and foreign earnings. Exemptions for charitable trusts and political parties remain, while deductions for salaries, rent, and employee welfare expenses have been specified. A key feature of the new tax law is section restructuring to make tax provisions more accessible and easier to understand for taxpayers. The Bill also introduces faceless assessment and dispute resolution mechanisms, reducing bureaucratic delays and human intervention. Tax compliance will become more streamlined with mandatory electronic filing, expanded tax audit requirements, and digitised documentation. The General Anti-Avoidance Rule (GAAR) has been reinforced, along with stricter transfer pricing regulations to monitor cross-border transactions and prevent tax avoidance.The Bill is expected to omit references to the old tax regime, officially making the new tax regime the default. However, taxpayers can still opt for the old tax regime if they choose. With a focus on digital compliance, transparency, and efficient tax administration, the Income-Tax Bill, 2025, marks a major shift in India’s taxation framework.Watch Dinesh Kanabar, CEO of Dhruva Advisors LLP; Sandeep Jhunjhunwala , Partner , Nangia Andersen LLP and Ved Jain, Tax Expert in conversation with Business Today Editor, Siddharth Zarabi.

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