New Income Tax Bill 2025 Navigator: Know Which Section is now Listed under Which Clause in New Bill?:

New Income Tax Bill 2025 Navigator: Know Which Section is now Listed under Which Clause in New Bill? Finance Minister Nirmala Sitharaman introduced the New Income Tax Bill 2025 in Lok Sabha on Thursday, which contains 536 clauses across 622 pages and aims to replace the existing 823-page law that has been in effect for 64 years. The New Income Tax Bill 2025, written in clearer language, eliminates the concept of "assessment year" and replaces it with "tax year," which corresponds to the financial year. The new 622-page Income Tax Bill 2025 seeks to replace the 60-year-old Income Tax Act of 1961 and, once passed, will be known as the Income Tax Act of 2025. It is expected to go into force in April 2026. The Income Tax Act of 1961, which has been amended multiple times over the years, is being replaced by the Income-tax Bill of 2025 to consolidate and update the income tax law. The new bill seeks to simplify and streamline the tax structure, making it easier to understand and comply with for taxpayers and administrators. The bill establishes a faceless jurisdiction of income tax authorities, allowing for distant and digital tax administration. It provides provisions for alternative dispute resolution, such as a Dispute Resolution Committee and advance rulings, to enable the efficient resolution of tax issues. While the bill proposes several amendments, the fundamental income and capital gains tax rates remain unchanged. The bill's primary goal is to simplify the terminology used in tax regulations to make compliance easier. Here are a few discussions of sections that are now listed under different clauses in the new bill.

Section 80C

All taxpayers are familiar with the 'Section 80C' deductions, a provision in the Income Tax Act of India that exempts certain expenses and investments from income tax. Section 80C provides for an annual deduction of up to Rs 1.5 lakh from an individual's total taxable income. Only individual taxpayers and Hindu Undivided Families are eligible to benefit from 80C tax exemptions for investments. Section 80C covers a wide range of investment options, including equity-linked savings schemes (ELSS), public provident fund (PPF), life insurance premiums, National Pension System (NPS) tax-saver deposits, and many more. Multiple instruments are eligible for deductions under 80C, with the maximum amount set at Rs 1.5 lakh. In the new bill, these deductions will be categorised under Section 123. Over 300 outdated or omitted provisions from the current Income Tax Act have been abolished by the New Income Tax Bill, including Sections 80CCA (deduction for investment in National Savings Scheme) and 80CCF (deduction for investment in long-term infrastructure bonds).

Life Insurance and PF Contributions

In addition, the bill reorganised several tax deductions. Life insurance premiums, provident fund contributions, and deferred annuities will all now be listed under Clause 123. Deductions for home loan interest will be allocated between Clauses 130 and 131. Education loan interest deductions have been shifted to Clause 129. Clause 124 now covers pension scheme contributions, whereas Clause 125 covers Agnipath Scheme deductions. Several other deductions previously contained in Section 80C have been moved to specific clauses.

Other Sections and Clauses

The expected changes to the income tax bill will include considerable revisions to numbers, clauses, and sections addressing multiple topics currently covered in the Income Tax Act of 1961. For example, the new tax regime, which is listed under Section 115BAC in the existing Income Tax Act, will be relocated to Section 202 in the new bill. Similarly, income tax returns (ITRs) will be filed under Section 263 of the new bill rather than Section 139 of the current law. To Read More Download New Bill 2025 Navigator from Below Link: