This year has brought several tax-related benefits for the common man. The central government provided a significant gift by reducing the Goods and Services Tax (GST). Additionally, the New Income Tax Bill 2025 was passed in August 2025. Under this bill, numerous changes will be made to the income tax structure, which will have a direct impact on the general public.

When Will The New Income Tax Bill Be Implemented?

Taxpayers will be able to avail the benefits of the new bill during the ITR filing next year. It is scheduled to be implemented nationwide starting April 2026. If you file an Income Tax Return (ITR) annually, it is crucial to be aware of the changes being introduced under this bill.

What Will Change Under The New Income Tax Bill 2025?

Since the Income Tax Act of 1961 had become outdated, the need for a new framework was felt. Consequently, the central government introduced the New Income Tax Bill 2025. Key changes include:

Simplification: The language of the Act will be made simpler and clearer.

Tax Year Concept: The confusing concepts of "Previous Year" and "Assessment Year" will be abolished and replaced by a unified "Tax Year" concept.

Digitalisation: The Central Board of Direct Taxes (CBDT) has been given more powers to further promote digitalisation.

Structure: The bill will be organised into 536 sections and 16 schedules to make it easier to read and understand.

TDS And Dividends: A facility for a "Zero TDS Certificate" will be provided. Additionally, Section 80M will be reintroduced regarding deductions on dividends.

Refunds: Even if the ITR is filed after the deadline, there will be no issues in receiving refunds. All clauses that previously hindered this process will be removed.

Changes In Property Deductions

The New Income Tax Bill has simplified rules related to property tax benefits:

Standard Deduction: A standard deduction of up to 30 per cent will be available after the payment of municipal taxes.

Pre-construction Interest: The deduction for interest paid before the construction of a house (pre-construction interest) will apply to both self-occupied and rented properties.

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Vacant Business Property: Business properties that are not in use or have been vacant for a long time will not be taxed.

Clause 20: This clause ensures that income from house property falls under the tax ambit, except when the property is being used for professional purposes.

Changes In Pension Deductions

The lump-sum portion of the pension withdrawn by a beneficiary is known as Commuted Pension. Previously, the tax deduction benefit on this amount was available only to employees. Now, this benefit has been extended to non-employees as well. For example, individuals receiving pension benefits from LIC will now be eligible for deductions on the commuted (lump-sum) amount.

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