New Income Tax Bill 2025!!- Highlights

New Income Tax Bill 2025!!

Key Highlights: 1. Simplified Act : Reduced from 801 pages to 622 pages, a 23% reduction. 2. Introduction of "Tax Year" Concept : Replaces confusing terms like "Assessment Year", "Previous Year", and "financial year". 3. Changes in Sections : Removal of Section 44AD and introduction of new Section 58 for presumptive taxation. 4. Definition of Accountant : An accountant is now defined as a Chartered Accountant. 5. No Changes in Tax Regime Rates : No major changes to tax slabs or old vs new tax regime. 6. No Changes in Capital Gain Tax Rates : Short-term capital gain tax rate remains 20%, while long-term capital gain tax rate remains 12.5%. 7. STT not allowed as expense : STT paid on selling and purchasing shares cannot be claimed as an expense while computing capital gains. 8. Unutilized capital gains : Must be parked in a specified bank account as per scheme notified by Central Government. 9. Time limit for acquiring new asset : Counted from the date of receipt of compensation if the capital asset is acquired by way of compulsory acquisition. (In the old act, it started from the acquisition date.) 10. Definition of Agriculture Income : Remains unchanged and continues to be exempt income. 11. ITR Filing Due Dates : Remains unchanged at July 31st for individuals and HUFs. 12. Updated ITR Rules : Taxpayers can file updated ITRs up to 4 years from the end of the relevant assessment year. 13. Applicability : Effective from FY 2026-27. 14. Five Heads of Income : Remain unchanged. 15. Exemptions : Shifted to a separate schedule under Section 10. 16. TDS Provisions : Simplified, building on previous finance acts. 17. CH VIA and Profit-Linked Deductions : Remain unchanged, despite initial plans for sunset. 18. Sector-Wise Deductions : Unchanged for businesses. 19. Proceedings : Assessment, appeal, revision, DRP, rectification, etc., remain unchanged. Important Exemptions : - Daily and Constituency Allowances : Still exempt for MPs and MLAs. - Exemptions to Political Parties : Continue unchanged. Implications and Next Steps: The New Income Tax Act 2025 is expected to be effective from April 1, 2026. As professionals, it's essential to stay updated on these changes and their implications.

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