In Budget 2025, Finance Minister Nirmala Sitharaman unveiled significant income tax savings, giving taxpayers more funds and introducing modifications to the way they compute their obligations. A noteworthy point is that individuals with earnings up to Rs 12 lakh are exempt from paying income tax in the updated taxation system.

During her speech, the Finance Minister announced that individuals earning up to Rs 12 lakh will be exempt from paying taxes. Taking into account the standard deduction of Rs 75,000, the effective tax-free threshold is raised to Rs 12.75 lakh.

How much tax do I have to pay? Calculate now

According to the Finance Bill, 2025, on the Central Board of Direct Taxes (CBDT) website, income taxed at special rates is not considered in the rebate calculation. This means that you are still eligible for a rebate even if your total income exceeds Rs 12.75 lakh due to capital gains.

The New Income Tax Bill 2025, which aims to replace the Income Tax Act 1961, seeks to simplify and simplify tax rules.

We take a look at some tax aspects regarding the sale of property

Carry Forward Of Losses From House Property
If you have a loss from one house property, you can adjust it against income from another house property. If there’s still a loss after this, you can set it off against income from other sources, but only up to Rs 2 lakh a year. Any loss beyond Rs 2 lakh cannot be adjusted against other income in the same year.

“The remaining loss (unabsorbed loss) can be carried forward for the next eight years, but it can only be adjusted against income from the house property in those years.

The Income Tax Bill 2025 introduces key amendments addressing foreign exchange fluctuations in capital gains taxation for non-resident investors, a move expected to reduce tax burdens and enhance market participation, tax experts said.

A major shift under the Financial Bill 2025 allows non-residents to adjust acquisition costs based on currency fluctuations when computing capital gains tax on unlisted shares and stocks purchased in foreign currency.

“The introduction of the ‘Variation in Liability’ provision under Section 42 enables non-residents to offset forex fluctuations, ensuring a more accurate tax assessment,” said Prithiviraj Senthil Nathan, partner at King Stubb & Kasiva.

Previously, non-resident investors were taxed on long-term capital gains from unlisted securities at 12.5 per cent without any forex adjustment benefits.

One of the primary concerns generated by the release of the new Income Tax Bill 2025 is whether late filers will be entitled to refunds when filing their Income Tax Return (ITR) beyond the deadline. The bill, slated to be implemented from FY2026-27, contains provisions that have created uncertainty regarding the entitlement of late filers to refunds.

Major provisions in the new bill
Clause 263(1)(a)(ix) of the new bill has been criticized by experts, which says that those who are claiming refunds should file their ITR within the stipulated due date. This is different from the existing Income Tax Act, 1961, where taxpayers can claim refunds even if they submit a delayed return by December 31 of the assessment year.

The Union Budget 2025-26 has introduced major changes to Tax Collected at Source (TCS), offering relief to Indian students aspiring to study abroad. These revisions aim to reduce the financial burden on families by lowering tax implications on foreign remittances under the Liberalised Remittance Scheme (LRS). Under this scheme, authorized dealers collect TCS when individuals transfer funds abroad. However, TCS is not an additional tax but an advance that can be adjusted against total income tax liability or refunded if overpaid.

How This Benefits Students and Parents

Education loan borrowers get full relief from TCS on tuition fee remittances, reducing financial burden.
Families remitting personal savings still face 5% TCS on amounts exceeding Rs 7 lakh, but this is significantly lower than the 20% imposed on general remittances.

Taxpayers can now easily compare sections of the Income Tax Act, 1961, with corresponding clauses in the new Income Tax Bill, 2025, through an online utility provided by the tax department. The Section-to-Section mapping has been uploaded on the I-T department’s website for public access.

“Kind attention Taxpayers! The utility to check section of Income Tax Act, 1961 vis-a-vis corresponding Clause of New Income Tax Bill is now live,” read the Income Tax India post on X.

The simplified Income Tax Bill, 2025, was introduced in the Lok Sabha on February 13 by Finance Minister Nirmala Sitharaman. Once enacted, it will replace the 64-year-old Income Tax Act, 1961, which has become complex due to its traditional drafting style and numerous amendments.

The new Income Tax Bill, 2025 contains some provisions which have created ambiguity regarding the eligibility for claiming tax refunds.

To be specific, clause (ix) under ‘Section 263(1)(a)’ of the new Bill mandates that a taxpayer who intends to claim a refund, is required to file their Income Tax Return (ITR) within the “due date” (the date of the financial year immediately succeeding the relevant “tax year”).

However, ‘Chapter XX’ of the new Bill dealing with refunds provides for interest on refunds even in cases where returns are filed “outside of the due dates”.

There is also no restriction placed on claiming a refund in a revised or belated tax return, unlike in the case of an updated return, in the new Bill, say experts.

It seems that the proposed Income Tax Bill, 2025, has made a minor change in language with the residential status clause. Earlier, Indians who moved abroad ‘for the purpose of employment’ enjoyed a relaxation from Indian tax residency provisions namely 182 days instead of 60 days for others. While others had to satisfy the 60 days clause, but if these persons who moved abroad 'for the purpose of employment' stayed in India for less than 182 days in the current financial year then they would have been considered non-residents under the Income Tax Act, 1961. Now as per the proposed Income Tax Bill, 2025, the phrase mentioned above has been changed to Indians who moved abroad “for employment outside India”.

Due to this change in language of the proposed Income Tax Bill, 2025, job-seekers, self-employed, professionals, etc may now fall outside the ambit of the relaxed Indian tax residency laws (182 days).

India's much-awaited Income-Tax Bill 2025, replacing the country's 6-decades old incumbent framework, has been welcomed by a vast majority of professionals, businesses and citizens. That's not surprising for a society that has come such a long way, from even just a decade ago, with respect to the quality of its business environment, its accelerated digital transformation and explosion in its entrepreneurship. This tax bill seems perfectly timed with its promise to:

Simplify and ease conduct of business

Bring clarity to policy and reduce scope for tax disputes

Institutionalise a reliable digital knowledge base of our tax environment to streamline tax administration

In many ways, India's recent transformation has been both relentless and holistic.

Finance Minister Nirmala Sitharaman introduced the New Income Tax Bill 2025 in Lok Sabha earlier this week. The New Income Tax Bill is expected to replace the decades old Income Tax Act 1961. It is less complicated and easier for the taxpayer to understand, says the government. The government has released a list of top 30 FAQs that taxpayers may have about the New Income Tax Bill 2025. We take a look:

New Income Tax Bill 2025: Top 30 FAQs Answered

1. When was the current Income-tax Act passed?
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.

The Income Tax Bill, 2025, tabled in Parliament on Thursday, introduces changes for non-resident Indians (NRIs), particularly regarding capital gains, tax deducted at source (TDS), and tax recovery measures.

“The Bill introduces more stringent measures for tax recovery from non-residents: Enhanced powers for tax authorities to access electronic records, including emails, social media accounts, and online banking information during searches. This aims to improve tax compliance and prevent evasion by leveraging digital footprints,” said Pallav Pradyumn Narang, partner, CNK (a legal firm).

Under new provisions NRIs earning Rs 15 lakh or more annually in India will be classified as residents for tax purposes.

The current tax system in India owes its origin to the first War of Independence in 1857. It was to fill the near-empty treasury of the British government ruling India that the first Income Tax Act was introduced in 1860. After a few iterations in the ensuing years, a comprehensive Income Tax Act was passed in 1922. In 1956, Nicholas Kaldor submitted an extensive report for a coordinated tax system culminating in the introductions of ancillary taxes like wealth and gift taxes and, eventually, an overhauled Income Tax Act, 1961. In keeping with the ethos of the sixties and seventies, the direct tax code kept getting amended year after year with the ostensible aim of promoting equity (through increasingly progressive tax rates which reached an astounding peak of over 97% in the seventies), plugging “loopholes” to prevent tax evasion and “promote” growth of certain sectors and regions through specific incentives and deductions.

The Income-tax Bill, 2025 has been tabled in Parliament, marking a significant step toward simplifying the language and structure of the Income-tax Act, 1961. No major tax policy changes and no modifications of tax rates have been made in the Income-tax Bill, 2025. Overall, there will be 23 chapters instead of 47, and there will be 536 clauses in place of 819 sections.

The Income Tax Bill 2025 has several aspects to be considered by the Non-Resident Indians (NRIs) as Clauses replace Sections. A non-resident Indian means an individual, who is not a resident and is (i) a citizen of India; or (ii) a person of Indian origin. Here are some key Clauses for NRI’s to take note of.

Union Finance Minister Nirmala Sitharaman on Thursday introduced the Income Tax Bill, 2025, in the Lok Sabha and urged Speaker Om Birla to constitute a select committee to examine the proposed piece of legislation.

“The terms and conditions regarding the committee will also be decided by the honourable Speaker. The committee shall make a report by the first day of the next session,” Sitharaman said after the House passed a motion by voice vote allowing the introduction of the Bill, amid protests from Opposition parties.

According to the “Frequently Asked Questions” (FAQs) released by the Central Board of Direct Taxes (CBDT), after a Bill is passed by Parliament and it becomes an Act, new rules and forms will be notified and simultaneously software development will be carried out to set up the systems and processes for various administrative and quasi-judicial functions.

The simplified Income Tax Bill, which is half the size of the 1961 Income Tax Act, seeks to achieve tax certainty by minimising the scope of litigation and fresh interpretation, the Income Tax department said on Thursday.

The new bill, introduced in the Lok Sabha, has a word count of 2.6 lakh, lower than 5.12 lakh in the I-T Act. The number of sections is 536, as against 819 effective sections in the existing law.

The number of chapters has also been halved to 23 from 47, according to the FAQ issued by the I-T department.

Today's India is the world's fastest growing large economy that has leveraged technology to attain financial inclusion at an unprecedented pace and boasts of the third largest start-up ecosystem in the world. However, while various aspects of India's economic, business and compliance landscape have evolved significantly with government's specific focus on ease of doing business, the tax system failed to keep pace.

The Income Tax Bill 2025 aims at simplifying India's tax system without making any substantive changes to the existing tax framework. It focuses on streamlining the existing income tax law. The Income Tax Act of 1961 is considered archaic, cumbersome and complex.

The new Income Tax Bill 2025, set to be tabled in Parliament on Thursday, marks a historic moment in India’s tax landscape, as it will replace the current year legislation introduced way back in 1961. The bill, once passed, will come into effect from April 1, 2026.

“Aimed at overhauling the nation’s tax system, the bill seeks to eliminate obsolete sections that have accumulated over decades. Its primary objective is to simplify the tax laws, ensuring they are more transparent, easier to interpret, and taxpayer-friendly. By replacing complex provisions with clearer provisions, it aims to reduce legal disputes and encourage voluntary tax compliance,” says Rohinton Sidhwa, Partner, Deloitte India.

The new Income Tax Bill, 2025 provides for a specific section which outlines the rules for determining profits and gains from construction contracts and service contracts for the purpose of computation of tax.

In the I-T Act, 1961, the ‘Income Computation & Disclosure Standards’ (ICDS) were introduced as a separate section, distinct from the provisions governing profits and gains from business and profession. But the bill seeks to integrate the ICDS provisions within the broader framework of business and profession income, streamlining its application and interpretation, say experts.

“This alignment is expected to enhance clarity and consistency in tax computation, reducing ambiguity in the treatment of income and ensuring uniform compliance across businesses,” said Amit Maheshwari, tax partner, AKM Global.

The New Income Tax Bill — to be called the Income-Tax Act, 2025, once passed – is set to be presented in Parliament on February 13, and aims to replace the six-decade-old Income Tax Act of 1961. It will extend to the whole of India and shall come into force on the 1st April, 2026.

The Bill aims to simplify and modernize India’s tax structure, making compliance easier for taxpayers while ensuring a fair and transparent system.

“Looking at the space occupied by the New Income Tax Bill, which is spread over 622 pages against the existing Income Tax Act which runs into 1647 pages, is itself a sign of attempt towards simplucation,” said Balwant Jain, a tax and investment expert.

The new bill runs into 536 sections against 298 existing sections.

Social media influencers and digital content creators have become some of the highest-earning individuals in today’s economy, leveraging brand deals, sponsorships, and digital platforms to generate substantial income. From luxury brand collaborations to big-money endorsement deals, the influencer industry has grown into a powerhouse. However, with this success comes increased scrutiny—especially from tax authorities. Now, the Income Tax Bill, 2025 has proposed to bring influencers firmly under the tax net.

Freebies, barter deals, and social media earnings will no longer go unnoticed, and influencers will be required to disclose and pay taxes on their income just like any other business. “The Income Tax Bill, 2025 does not explicitly mention ‘influencers’ or ‘brand partnerships,’ as far as direct tax is concerned, but its provisions could have a significant impact on digital content creators based on general tax principles and interpretations,” Siddharth Chandrashekhar, advocate and counsel, Bombay High Court and panel counsel for CBIC & CBDT, told BrandWagon Online.