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INCOME TAX NEW RULES 2025 ACT

Vikrant sharma
Income Tax Bill 2025: Simplified Tax Year, New Limits for Sections 44AD, 44ADA, and Revised Deductions and Exemptions. The Income Tax Bill 2025 replaces the Income Tax Act, 1961, introducing a simplified 'Tax Year' system and increasing limits for businesses and professionals under sections 44AD and 44ADA. Housing loan interest deductions are now limited to rental income, with no deductions for self-occupied properties. Exemptions for House Rent Allowance are removed, but travel allowances remain. Standard deduction is set at 75,000, with employer contributions to NPS and EPF deductible up to 14% and 12% of basic salary, respectively. Tax filing deadlines are extended, while capital gains tax rates remain unchanged. The bill emphasizes digital transactions for MSMEs and maintains audit rights for Chartered Accountants, reducing the law to 622 pages for clarity. (AI Summary)

The Income Tax Act, 1961, is HISTORY NOW!!

The Income Tax Bill 2025 brings clarity, simplifies compliance, and encourages digital adoption.

IMPORTANT HIGHLIGHTS:-

1️⃣No More AY & PY Confusion! – Say hello to 'Tax Year' instead of the complicated Assessment Year & Previous Year system!

2️⃣ Higher Limits for Businesses & Professionals

📈 44AD (Business): ₹2 Cr ➡ ₹3 Cr

📈 44ADA (Professionals): ₹50 Lakh ➡ ₹75 Lakh

3️⃣ Housing Loan & Rental Income Updates

🏡 Interest on Housing Loan – Can only be set off against rental income

🏡 Self-Occupied Property – No deduction for housing loan interest

🏡 Loss from Rental Property – Can be adjusted against other rental income but not carried forward

4️⃣ Exemptions & Allowances Tweaked

💼 HRA (House Rent Allowance) – No exemption allowed!

✈️ Travel & Daily Allowance – Still allowed for official tours/trips

📉 Standard Deduction: ₹75,000

🏦 Employer Contributions (Deduction Eligibility) –

🔹 NPS: Up to 14% of basic salary

🔹 EPF: Up to 12% of basic salary

5️⃣ Tax Filing Due Dates Extended

🗓️ Tax Audit Filing: Sept 30 ➡ Oct 31

🗓️ ITR Filing: Oct 31 ➡ Nov 30

6️⃣ No Change in Capital Gains Tax – LTCG & STCG rates remain unchanged!

7️⃣ Digital Push for MSMEs – Businesses with up to ₹10 Cr turnover via digital transactions get audit relief!

8️⃣ CA Exclusive Audit Rights – Despite speculations, only Chartered Accountants can conduct tax audits. Relief for CAs!

9️⃣ More Sections, Less Complexity – The new law has 536 sections, 23 chapters, and 16 schedules – structured better for easier interpretation!

🔟 Fewer Pages, More Clarity – From 823 pages (old Act) ➡ 622 pages (new Bill). More concise, yet comprehensive!

Stay tuned for further updates!

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