Explore Income Tax Bill PDF 2025 with simplified tax reforms. Know the key Income Tax Bill 2025 details, applicability & changes in new tax structure.

Income Tax Bill PDF 2025: Complete Overview of New Tax Structure

The Income Tax Bill PDF 2025 has stirred significant attention ever since it was presented in Parliament on February 13, 2025. This new bill represents a bold attempt by the government to modernize and streamline India's income tax structure. With its simplified format and updated regulations, the Income Tax Bill 2025 details are crucial for taxpayers, professionals, and students alike.

What Is the Income Tax Bill PDF?

The Income Tax Bill PDF is a comprehensive document that lays out the proposed provisions of the Income Tax Act 2025. Contrary to earlier expectations, the law won’t be renamed the Direct Tax Code. Instead, it retains a familiar name with a modernized framework. This version of the law aims to reduce complexity, increase clarity, and align Indian tax systems with global standards.

To ensure transparency and public participation, the government has made the Income Tax Bill PDF accessible online. Taxpayers and professionals can now download and study it in depth to prepare for the upcoming changes.

Applicability of the New Law

The new law, though passed in 2025, will come into effect from April 1, 2026. Consequently, the first financial year to be governed by the updated law will be FY 2026-27. This transitional approach gives individuals, businesses, and students ample time to adapt.

For academic purposes, the Income Tax Bill 2025 details are especially important. Exams conducted until March 31, 2026, will continue using the old Income Tax Act, 1961. However, exams held after April 1, 2027, will be based entirely on the new Act.

Why the Change? Objectives Behind the Reform

The government seeks to accomplish three main goals with this bill:

• Modernization of India's outdated tax code.

• Simplification through easy-to-understand language and formatting.

• Efficiency, ensuring smoother compliance and fewer disputes.

Each of these objectives plays a critical role in the bill’s design and execution.

Key Structural Changes in the Income Tax Bill PDF

One of the biggest reforms is the reduction in complexity. The old law included over 800 provisions across 298 sections, while the new Income Tax Bill PDF narrows it down to 536 sections, neatly grouped into 23 chapters instead of 47.

In addition:

• Word count has dropped from 5.12 lakh to 2.6 lakh.

• Total pages have been trimmed from 822 to 622, making it easier to navigate.

• Tables, formulas, and simplified terminology have replaced verbose legal language.

These structural changes will make the law more digestible for taxpayers and professionals alike.

Transition from Old Terms to New Norms

A standout feature is the replacement of traditional terms like “Previous Year” and “Assessment Year” with a new, simplified concept: “Tax Year.” This shift will help users avoid confusion and maintain consistency across filings.

Moreover, the bill also continues to offer both the old and new tax regimes. While many had anticipated the end of the old regime, the government chose to retain both options, giving taxpayers the flexibility to choose based on their financial preferences.

Digital Asset Taxation: A New Addition

In a major move, the Income Tax Bill PDF formally introduces taxation on Virtual Digital Assets (VDA)—such as cryptocurrencies and NFTs. This change is part of a broader attempt to plug loopholes and bring modern financial instruments under the tax radar.

Undisclosed income through VDAs will now be taxable, marking a decisive step towards regulating the digital economy.

Income Classification and Section Renumbering

Even though the bill simplifies the structure, it retains the five heads of income:

• Salary

• House Property

• Business or Profession

• Capital Gains

• Other Sources

To further streamline navigation, section numbers have been renumbered. For instance:

• Salary income now spans sections 15–19

• Business income appears under 26–66

• Capital gains are under 67–91

These changes make it easier for users to locate relevant laws without disrupting the core concepts.

Tax Slabs and Rebates

The tax slab structure remains unchanged from the Union Budget 2025. Notably, taxpayers with an annual income of ₹12 lakh will pay zero tax after accounting for available rebates.

This shows the government's commitment to easing the burden on middle-income earners while maintaining a broad and fair tax base.