Income-Tax 1961 and 2025: New Income Tax Bill 2025 Highlights Side-by-Side 

Introduction

The Income-Tax Act, 1961, guided India’s taxation for over 60 years but grew complex with time. To simplify and modernize the law, the government introduced the New Income Tax Bill 2025. This blog presents a side-by-side look at the 1961 Act and the 2025 Bill, highlighting key changes as published on the official government website.

What is the new income tax bill 2025? 

The Income-Tax Act, 1961, has been India’s core tax legislation for over sixty years. While it laid the foundation of direct taxation, repeated amendments made it bulky, complex, and difficult for taxpayers to interpret. By 2024, the law had grown into thousands of sections, explanations, and provisos that often led to confusion and disputes.

The New Income Tax Bill 2025 was introduced to replace this outdated framework with a clearer and simpler law.

According to the Income Tax Department’s official website, the new Bill focuses on:

• Simplification of language – Instead of long, technical sentences, the Bill uses plain wording to make the law more readable.

• Reorganized structure – Provisions are arranged logically, with related rules grouped together for easy reference.

• Reduced bulk – Several redundant clauses from the 1961 Act have been dropped, bringing down the size of the law significantly.

• Clear tax rates and provisions – Important details such as rates are tabulated, eliminating the need to cross-reference multiple sections.

In essence, while the 1961 Act became known for its complexity, the 2025 Bill marks a fresh beginning, aiming to create a law that is modern, concise, and taxpayer-friendly.

Side-by-Side: Income tax bill 1961 and Income tax bill 2025 

In essence:

The Income Tax Act 1961 represents decades of amendments that made the law bulky and complex. The New Income Tax Bill 2025, on the other hand, offers a simplified and reorganized version supported by tools like the Navigator, an executive summary, and FAQs. It is designed to reduce confusion, improve clarity, and make compliance easier for taxpayers and professionals alike.

General FAQs on the Broad scope of New Income-tax Bill 2025

The Government of India has officially published a detailed set of Frequently Asked Questions (FAQs) on the New Income Tax Bill 2025. These FAQs explain why the 1961 Act needed replacement, what changes have been introduced in the new Bill, and how the law has been simplified. They also cover topics such as the removal of redundant provisions, the use of the term “tax year,” treatment of non-profit organizations, changes in TDS/TCS, and how the old and new provisions will co-exist.

For authenticity, the complete FAQs are available directly on the Income Tax Department website.

Frequently asked questions on Income tax bill 2025