Income Tax Bill 2025 | Comparison of deductions vs existing actHere is a look at all deductions that have changed or have been introduced in the new I-T bill:
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The new Income Tax bill, introduced in the Lok Sabha today by Finance Minister Nirmala Sitharaman has a word count of 2.6 lakh, lower than 5.12 lakh in the I-T Act. The number of sections is 536, as against 819 effective.
It is concise, simpler, and crisper than the existing law. Here is a look at all deductions that have changed or have been introduced in the new I-T bill:
| Category | Old Law (Income Tax Act, 1961) | New Law (Income Tax Bill, 2025) | Change |
|---|---|---|---|
| Standard Deduction | ₹50,000 | ₹75,000 (new tax regime) | Increased deduction |
| 80C (Investments & Insurance) | ₹1,50,000 | No change | No impact |
| 80D (Health Insurance) | ₹25,000-₹50,000 | No change | No impact |
| House Rent (80GG) | ₹5,000 per month | No change | No impact |
| Home Loan Interest (80EEA) | ₹1,50,000 (first-time buyers) | No change | No impact |
| Deductions for Disabled Individuals | ₹75,000 - ₹1,25,000 | No change | No impact |
| Electric Vehicle Deduction | No such benefit | New deduction for EV loan interest | New benefit |
| Startup & SEZ Tax Relief | Limited provisions | Extended deductions for eligible businesses | New benefit |
Key highlights:
1) Most deductions remain unchanged (80C, 80D, 80GG, 80U, 80EEA).
2) Higher standard deduction (Rs 75,000) benefits salaried employees and pensioners under the new tax regime.
3) New deductions introduced for electric vehicle purchases and startup tax relief.
4) No increase in 80C or home loan interest limits.