1.Income Tax Bill 2025 Highlights (Income Tax Bill)
What & Where
Income Tax Bill 2025: Indian legislation replacing Income Tax Act 1961, cleared by both Houses of Parliament
Covers “virtual digital space”: any email, social-media, cloud, website or online account environment
Establishes single “tax year” nationwide: 1 Apr – 31 Mar for all taxpayers
Quick Facts for MCQs
Legal & Policy
- Replaces dual concepts “assessment year” and “previous year” with single “tax year”
- Aligns AMT rules for LLPs, ensuring minimum tax despite deductions
- Grants tax authority access to virtual digital space, mandates company assistance
Compliance & Administration
- Introduces advance nil-TDS certificates for individuals without tax liability
- Removes TCS on education-related LRS remittances via financial institutions
- Simplification aimed at reducing litigation and easing filing procedures
Fiscal Numbers
- Reports 1.9 % dip in gross direct tax collections FY 2025-26 vs FY 2024-25
- Collections stand at ₹7.99 lakh crore despite policy rationalisation
- AMT expected to marginally boost revenue from deduction-heavy entities
Key Data Points
| Feature | Data-Point |
|---|---|
| Bill purpose | Simplify, rationalise, shorten 1961 Act |
| Virtual digital space | Email, social media, online accounts, cloud, websites |
| Tax year span | 1 Apr – 31 Mar |
| TCS on LRS education | Nil when financed by recognised financial institutions |
| Nil-TDS certificate | Available in advance to zero-tax-liability individuals |
| AMT scope | Now applicable to LLPs, aligned with IT Act norms |
| Investigative power | Tax officers may bypass passwords during probes |
| FY 2025-26 gross direct tax | ₹7.99 lakh crore (-1.9 % YoY) |
Related UPSC Prelims PYQs
Which of the following is not a recommendation of the task force on direct taxes under the chairmanship of Dr. Vijay L. Kelkar in the year 2002?






