From Complexity to Clarity: A Comparison of Income Tax Act 1961 and 2025

The newly proposed Income Tax Act 2025 introduces a simplified and modernized tax framework compared to the existing Income Tax Act 1961. With reduced sections, clearer language, and the introduction of a single “Tax Year” concept, the new law aims to improve ease of compliance.

Major changes include revised tax slabs under the new regime, higher rebate limits, increased standard deductions, and rationalized TDS provisions. The Act also focuses on reducing litigation by decriminalizing certain offences and removing complex compliance requirements like higher TDS for non-filers.

Additionally, progressive measures such as the abolition of angel tax, extended timelines for updated returns, and enhanced thresholds for TDS on rent and interest reflect a taxpayer-friendly approach.

Overall, the Income Tax Act 2025 is designed to be more transparent, efficient, and aligned with modern economic practices, benefiting both individuals and businesses.