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CSThe Income Tax Act, 1961 — all 819 sections, 47 chapters — is being replaced by the Income Tax Act, 2025. Cleaner. Simpler. 536 sections. Same tax rates. Very different rulebook.
Here's every change that matters:
1. "Financial Year" and "Assessment Year" — gone.
Both terms are replaced by a single unified concept: "Tax Year."
2. Tax slabs? Untouched.
No new tax slabs. No changes to deductions under Section 80C or 80D. The ₹12 lakh zero-tax limit under the new regime remains fully intact (Income Tax India) — ₹12.75 lakh for salaried individuals after the standard deduction.
3. ITR deadlines — extended for some.
ITR-3 and ITR-4 for non-audit taxpayers now have a deadline of 31 August — extended from 31 July. ITR-1 and ITR-2 remain at 31 July. Tax audit deadline stays at 31 October. (Bajaj Finserv)
4. Revised return window — doubled.
Revised return deadline extended from 9 months to 12 months. New deadline: 31st March.
5. TCS on overseas travel — massively simplified.
For overseas tour packages, a flat 2% TCS now applies across the board, replacing the earlier slab-based system of 5% up to ₹10 lakh and 20% above that. (Cleartax)
6. TCS on LRS — education & medical.
For LRS remittances for education or medical treatment, TCS on amounts above ₹10 lakh has been reduced from 5% to 2%, reducing upfront cash outflow for families. (Cleartax)
7. Education & Hostel allowance — 30x jump.
Per child, per month: Education allowance goes from ₹100 → ₹3,000. Hostel allowance from ₹300 → ₹9,000.
8. HRA — 50% exemption extended to 4 more cities.
The 50% HRA exemption now covers 8 cities: Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Pune, Hyderabad, and Ahmedabad. (Bajaj Finserv) All others remain at 40%. Plus — if your annual rent exceeds ₹1 lakh and you're paying a family member, you must now disclose your relationship with the landlord. (India Budget) continued in pinned comment!
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