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Comprehensive repository of the Income Tax Act, 1961 (Updated with Finance Act 2025).
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Income Tax Act updates for AY 2025-26
The Finance Act 2025 has introduced several key changes to the Income Tax Act, 1961, effective from Assessment Year 2025-26. These updates focus on streamlining tax rates, enhancing digital compliance, and simplifying deductions for individuals and businesses.
New Tax Regime
Standard deduction increased to ₹75,000. New tax slabs applied as per Rule 114AAA.
Digital Audit
Enhanced limits for Section 44AB audits where 95% transactions are digital.
Section 10(13A) - House Rent Allowance
Any special allowance specifically granted to an assessee by his employer to meet expenditure actually incurred on payment of rent (by whatever name called) in respect of residential accommodation occupied by him, to such extent as may be prescribed having regard to the area or place in which such accommodation is situate and other relevant considerations.
- Applies only if rent is actually paid.
- Exemption is restricted to the least of specific limits defined in Rule 2A.
Section 32 - Depreciation
Depreciation is allowed in respect of buildings, machinery, plant or furniture, being tangible assets; and know-how, patents, copyrights, trademarks, licenses, franchises or any other business or commercial rights of similar nature, being intangible assets acquired on or after the 1st day of April, 1998, owned, wholly or partly, by the assessee and used for the purposes of the business or profession.
Section 44AB - Audit of Accounts
Every person carrying on business shall, if his total sales, turnover or gross receipts, as the case may be, in business exceed or exceeds one crore rupees in any previous year, get his accounts of such previous year audited by an accountant before the specified date and furnish by that date the report of such audit in the prescribed form duly signed and verified by such accountant.
Limit increased to 10 crores if at least 95% of transactions are digital.
Section 139AA - Quoting of Aadhaar Number
Every person who is eligible to obtain Aadhaar number shall, on or after the 1st day of July, 2017, quote Aadhaar number— (i) in the application form for allotment of permanent account number; (ii) in the return of income.
Where the person does not possess the Aadhaar Number, the Enrolment ID of Aadhaar application form, shall be quoted.
Section 192 - TDS on Salary
Any person responsible for paying any income chargeable under the head "Salaries" shall, at the time of payment, deduct income-tax on the amount payable at the average rate of income-tax computed on the basis of the rates in force for the financial year in which the payment is made, on the estimated income of the assessee under this head for that financial year.