Income Tax Act 2025 vs Income Tax Act 1961 — What Actually Changed (India)

1Why a new Act was needed

The Income Tax Act 1961 had grown to nearly 300 sections and 14 schedules, with amendment layers from 60+ Union Budgets. The same concept could span multiple sections, sub-sections and provisos. Tax practitioners had to cross-reference constantly. The 2025 Act is a consolidation — the tax policy is mostly unchanged but the structure is rationalized.

2What changed: structure and language

• Chapters have been renumbered and consolidated — related provisions (e.g. all capital-gains sections) are grouped together
• Provisos buried inside sections have been pulled out as separate numbered clauses for clarity
• Conflicting judicial interpretations have been addressed by incorporating settled Supreme Court positions into the text
• Tables replacing narrative text — slab rates, TDS rates and deduction limits are now in tabular form inside the Act
• Elimination of redundant provisions that were effectively overridden by later amendments

3What did NOT change: substance

• Tax slabs (old regime and new regime) — unchanged from Budget 2025
• Section 87A rebate: ₹12 lakh effective zero-tax threshold under new regime
• TDS rates and thresholds — same sections, renumbered but rates unchanged
• Deductions (80C, 80D, 24(b), 80E, etc.) — same limits, only old regime (unchanged)
• Capital gains rates (LTCG 12.5%, STCG 20% on equity; property LTCG 12.5% without indexation)
• Crypto/VDA 30% tax continues under the equivalent of Section 115BBH

4Key renumbering to watch

• Section 80C → new section covering approved investments and payments (deduction limit unchanged at ₹1.5 lakh)
• Section 115BAC (new regime) → new chapter consolidated with all regime-choice provisions
• Section 143(1) intimation → equivalent new section (number in the 2025 Act differs, but the process is identical)
• Section 139(4) belated return → new equivalent, same 31 December deadline
• Check the official cross-reference table (available on the Income Tax Department website) for the exact new section number before citing in a notice reply

5What this means for your ITR filing

• No change to your AY 2026-27 filing — use the same ITR forms notified by the CBDT
• If you receive a notice or order citing the new Act's sections, verify the old-Act equivalent using the official mapping
• Your CA or tax software will update section references automatically — you do not need to do anything different for this tax year
• Watch for amendments to the new Act in Budget 2026 — the first Budget after a new codification often fine-tunes the language