The Government of India has recently proposed a new Income Tax Bill 2025, which is likely to be implemented from 1 April 2026. This new bill will replace the 64 -year -old Income Tax Act 1961. The main objective of this new bill is to make the tax system simple, transparent and taxpayer-friendly.
Many significant changes have been made in the new income tax bill, which will directly affect the common man’s pocket. In this article, we will know in detail what are the new tax rules, who will benefit from them and will you really have to pay more tax.
New Income Tax Bill 2025: Overview
The main things of the new Income Tax Bill 2025 are as follows:
| Speciality | Description |
| Date of implementation | 1 April 2026 |
| Tax free income limit | Up to ₹ 12 lakhs |
| Standard deduction | ₹ 75,000 |
| Total section | 536 |
| Total chapter | 23 |
| Total schedule | 16 |
| Total page | About 622 |
| Tax slab | 7 slabs (0% to 30%) |
| Assessment year | Changed with tax year |
| Language | Simple and clear |
The main features of the new income tax bill
Big change in tax free income limit
According to the new bill, now no income tax will have to be paid on annual income of up to ₹ 12 lakh. This limit is much higher than the earlier ₹ 7 lakhs. Apart from this, salaryed persons will also get standard deduction of ₹ 75,000. In this way, income of up to ₹ 12.75 lakh in total will be tax free.
New tax slab
Tax slab has been made more progressive in the new bill:
- ₹ 0 – ₹ 4 lakh: 0%
- ₹ 4 lakh – ₹ 8 lakh: 5%
- ₹ 8 Lakh – ₹ 12 Lakh: 10%
- ₹ 12 Lakh – ₹ 16 Lakh: 15%
- ₹ 16 Lakh – ₹ 20 Lakh: 20%
- ₹ 20 Lakh – ₹ 24 Lakh: 25%
- Over ₹ 24 lakh: 30%
New concept of tax year
In the old law, where the assessment year and the previous financial year concept were brought, only the new bill has been brought to the tax year concept. This will make it easier for taxpayers to file ITR and reduce confusion.
Simple language and less pages
The new bill is covered in just 622 pages, while the old law was 880 pages. Simple language has been used in this, so that the common man will also be able to understand it easily.
Will you have to pay more tax now?
Most people will have to pay less tax under the new tax rules. some examples:
- Those who earn up to ₹ 12 lakh will not have to pay any tax
- ₹ 25,000 to earn ₹ 13 lakhs will save tax
- ₹ 15 lakhs will save ₹ 35,000 tax
- ₹ 20 lakhs will save ₹ 90,000 tax
- Those who earn more than ₹ 24 lakh will save tax up to 1.10 lakhs
However, those who earn a little more than ₹ 12.75 lakhs have to be careful. For example, if someone’s income is ₹ 12.76 lakhs, he may have to pay a tax of ₹ 60,000.
Who will benefit from the new bill?
Relief to middle class
The middle class will benefit the most from the new tax rules. About 1 crore people who earn up to ₹ 12 lakh will no longer have to pay any tax.
Double advantage to salary class
Employed people will also get standard deduction of ₹ 75,000 along with increasing tax free limit. In this way they will get double benefit.
Startups and small businessmen encourage
The new bill provides special tax exemption and concessions for startups and small businesses. This will promote entrepreneurship.
What else is special in the new bill?
Digital tax monitoring
The new bill proposes a digital tax monitoring system. This will curb tax evasion and it will be easier to comply with tax.
Strict action on tax evasion
The new rules provide strict action against those who steal tax evasion. Giving incorrect information will cost heavy fines and rights have been given to confiscate property.
Benefits on pension and investment
More tax benefits have been given on investing in NPS, EPF, insurance plans and mutual funds. This will encourage people to save and investment.
What will change for the common man?
Easy tax filing
The new bill makes the tax filing process simplified. Now the common man will be able to file his ITR without the help of any CA or tax expert.
Low paperwork
Most of the procedures have been made digital in the new rules. This will reduce the paperwork and save time.
Taxpayer charter
The new bill provides for a taxpayer charter, which will protect the rights of taxpayers. This will increase confidence between tax department and taxpayers.
Expert opinion on new bill
Most tax experts believe that the new Income Tax Bill 2025 is a progressive step. This will make the tax system simple and transparent. However, some experts say that it needs more clarity on some issues.
What to take care of taxpayers?
- The new rules will be applicable from 1 April 2026, so now make tax planning according to the old rules.
- Study new tax slabs according to your income and find ways of tax savings.
- Get acquainted with the digital tax filing system and learn ITR filing online.
- Take full advantage of the tax exemption and cuttings given in the new rules.
- Avoid any kind of tax evasion, as there is a provision of strict punishment on it in the new rules.
Disclaimer:
This article has been written only for the purpose of information. The new Income Tax Bill 2025 is currently proposed and may change. Law will be made only after this bill is passed in Parliament. Therefore, it would be better to consult a professional tax advisor for your tax planning.
