Key changes proposed in the Income Tax Bill, 2025 compared to the existing Income Tax Act, 1961:

🔑 Key Highlights of the Income Tax Bill, 2025 (ITB 2025)

1. “Tax Year” Replaces “Previous Year”
   The term “assessment year” is removed and replaced by “tax year” for simplification.
2. Royalty Income Clarification
   Taxation of royalties by non-residents mistakenly mentions income from sources “outside India”—likely a drafting error.
3. Tax Payments Not Deductible
   Taxes paid on income, including cess and surcharge, are clearly disallowed as business expenses.
4. Presumptive Taxation for Non-Residents
   Introduced for non-residents offering technology/services for electronics manufacturing—25% of receipts deemed taxable.
5. Books & Audit Mandatory
   Even under presumptive taxation, non-residents must maintain books and get audits done.
6. Special Schemes for Shipping, Aviation, Construction
   Presumptive income rules apply, but no set-off of losses or deductions is allowed.
7. Capital Gains Changes
   Exemption under Section 85 may no longer apply to depreciable assets; long-term capital loss carryforward rules are retained with transition provisions.
8. Tax Treaties Interpretation Updated
   If a term is undefined in treaties or ITB, it will follow definitions from Indian tax or other laws.
9. Shareholding Rule Tightened for Loss Set-Off
   If 51% shareholding changes between loss year and set-off year, losses can’t be carried forward.
10. LTCG for Non-Residents
    Now includes foreign exchange benefit; tax rate is 12.5% from July 23, 2024.
11. Refunds
    Can only be claimed if return is filed before the due date.
12. Company Tax Rates (22% / 15%)
    Deduction for inter-corporate dividends removed under 22% regime, retained under 15%.
13. DRP Directions
    Now must be reasoned orders but aren’t required to consider taxpayer evidence.
14. Lower TDS Certificates
    Broader scope; nil rate removed; AOs can cancel after hearing.

above points are the brief summary of proposed Income tax bill…for more you can make an enquiry on admin@ibleboom.com

Avinash Bhatt
Email: Bhattavi93@gmail.com