Saturday, March 29, 2025
New Income Tax Bill 2025: Key Changes and Reliefs
Effective Date: April 2026
Major Changes
No change in tax rates – The focus is only on simplifying the language and structure of the law.
Refund even with delayed ITR filing – Taxpayers can still claim TDS refunds even after missing the ITR filing deadline.
Nil TDS Certificate – Individuals or entities with no tax liability can get this certificate in advance to avoid TDS deductions.
Shorter TDS refund claim period – Reduced from 6 years to 2 years.
Full tax exemption on pension and gratuity – Complete exemption for family members receiving pension or gratuity after an employee’s death.
Structural Simplification
Sections reduced: 819 → 536
Chapters reduced: 47 → 23
Word count reduced: 5.12 lakh → 2.6 lakh
Preparation Timeline
Drafted in just 6 months
Around 75,000 hours of work
Presented in the February 2025 Budget Session
Government’s Next Steps
Will issue FAQs for public understanding
Rules to be in simplified language
Income Tax systems to be digitally upgraded before 2026 rollout
Significance
Biggest reform in 60 years
Greater transparency and ease for taxpayers
Aligned with the needs of the digital era
