Comparison of New Income Tax 2025 and Old Income Tax 1961
Section of Income Tax Bill, 2025 corresponding Sections of Income Tax Act, 1961
The current Income-tax Act was enacted in 1961 and came into existence with effect from 01.04.1962. It has been amended nearly 65 times with more than 4000 amendments, year on year through Finance Acts, based on the evolving requirements of modifications in taxation policy. Attempts have been made in the past, including those in 2009 and 2019 for simplification of the Income tax Act.
The Hon’ble Finance Minister in the budget speech in July 2024 stated that the purpose of the comprehensive review of the Income-tax Act, 1961, is to make the Act “concise, lucid, easy to read and understand”.
Sections: Total Sections in Existing Income Tax Act, 1961 are 819 whereas total sections in the Income Tax Bill, 2025 are 536 only.
Chapters: Total Chapters in Existing Income Tax Act, 1961 are 47 whereas total Chapters in the Income Tax Bill, 2025 are 23 only.
The drafting style of the new Bill is straightforward and clear, making the provisions easier to understand by incorporating more than 57 tables compared to 18 tables in the Income-tax Act, 1961. Sub-sections and clauses have been used, instead of relying on provisos and explanations for exceptions and carve-outs. This minimises cross references and conflict by aggregating all applicable provisions related to a single scenario in one place.
Read also: Clause wise details of the Income Tax Act 2025
Provisos (more than 1200) and Explanations (more than 900) have been removed, with their simplified content placed as sub-sections or clauses. Wherever feasible, procedural aspects and specific details are proposed to be provided by way of Rules.
Table
