New Tax Act 2025: 6 Key Changes You Need to Know
The Income Tax Act 2025, effective from April 2026, has introduced a set of rules that will affect your return filing. Taxpayers who are preparing to file their returns will notice big changes this year.
Even though there are some updates, like an upgraded e-filing portal and revised forms, it is the changes in the tax system that will affect you the most. Let us take a look at these 6 most important sections that will affect your return filing.
Section 11: Exempted Income
This section specifies what types of income are exempted. It covers areas like charitable trusts and donations.
The new concept is similar to the old rule, but it is now clearer and more organised to help the taxpayers easily claim tax exemptions.
Section 22: Home Loan Deductions
For those taxpayers who have taken home loans, Section 22 of the Income Tax Act allows them to claim deductions on both interest and principal repayments. The new rules make it easier to understand how to claim these benefits, so you get the full advantage. The new rules give better clarity regarding the eligibility and limits.
Section 126: Health Insurance Deductions
Section 126 of the New Act deals with deductions for health insurance premiums. This was earlier governed by section 80D.
If you have been paying for health cover, you will still be able to get tax benefits, but with a simpler process for claiming them.
Section 156: Easier Tax Rebates
Section 156, earlier known as section 87A, outlines the provisions for tax rebates for certain individuals.
The new framework simplifies the way tax rebates are claimed, making it easier for eligible taxpayers to reduce their tax burden. It will help you save on taxes and end the confusion while filing ITR.
Section 202: New Tax Regime
The new tax regime under section 202 is now the default option for most taxpayers. The new section replaces the earlier Section 115BAC. It comes with lower tax rates and fewer deductions. However, if the old system benefits you, you can still opt for it.
Section 263: Easy Tax Filing
Filing your tax return just got easier. Section 263, earlier known as section 139, simplifies the process by providing clearer guidelines and a smoother e-filing system. The goal is to reduce errors and make it easier for everyone to comply.
With these changes, the new tax law aims to make things simpler for taxpayers like you by reducing the confusion among taxpayers.
