Income Tax Act 2025: Income Provisions — Complete Old vs New Section Mapping
- CA Rohit Kolte
- Apr 16
- 5 min read
The Income Tax Act, 2025 (ITA 2025) has replaced the Income Tax Act, 1961 (ITA 1961) with effect from 1st April 2026. While no new taxes have been introduced and the tax rates remain unchanged, the entire structure of income computation has been reorganised, renumbered, and simplified. For taxpayers in India — this means familiar section numbers are changing.
This article provides a complete section-by-section mapping of all income-related provisions (आयकर कलमांचे नवीन मॅपिंग), helping you quickly find the new equivalent of every old section you've been using for decades.
Key Principle to Remember: The new Act is a consolidation and simplification exercise — not a policy overhaul. The tax treatment remains the same; only the section numbers, structure, and language have changed. Think of it as the same house, newly renovated and renumbered. (नवीन कायदा हा सरलीकरण आहे — कर दरात कोणताही बदल नाही.)
1. The Charging Section — How Income is Taxed
Aspect | Old Act (ITA 1961) | New Act (ITA 2025) | What Changed |
Charge of Income Tax | Section 4 | Section 3 | Tax charged on "total income" of the "tax year" (not "previous year" + "assessment year") |
Year of Reference | "Previous Year" (Sec 3) + "Assessment Year" (Sec 2(9)) | "Tax Year" (Sec 2(38)) | Single "Tax Year" concept replaces dual-year confusion. TY 2026-27 = FY 2026-27. No more AY. |
This is the most fundamental terminology change. For decades, taxpayers and CAs in Bhusawal to Mumbai have dealt with the confusion of "Previous Year" vs "Assessment Year." The new Act eliminates this entirely. Tax Year 2026-27 simply means the financial year 1 April 2026 to 31 March 2027 — and your return for this year will also reference "Tax Year 2026-27," not "AY 2027-28."
2. Heads of Income — Complete Mapping
The five heads of income remain the same under ITA 2025. The classification has not changed — only the section numbers and internal organisation have been updated. Here is the complete mapping:
2.1 Salary Income (वेतन उत्पन्न)
Provision | Old Act (ITA 1961) | New Act (ITA 2025) | Brief Note |
Chargeability of Salary | Sec 15 | Sec 15 | Same section number; scope unchanged |
Perquisites | Sec 17(2) | Sec 17 | Perquisite definition integrated into main text, not buried in provisos |
Profits in lieu of salary | Sec 17(3) | Sec 18 | Separated out for clarity |
Deduction from salary (Standard Deduction) | Sec 16 | Sec 19 | Rs 75,000 standard deduction (new regime) / Rs 50,000 (old regime) retained |
Exempt allowances | Sec 10(13A), 10(14) | Sec 11 + Schedule IV | HRA, LTA etc. moved to Schedule IV for cleaner text |
2.2 Income from House Property (घरभाडे उत्पन्न)
Provision | Old Act (ITA 1961) | New Act (ITA 2025) | Brief Note |
Chargeability | Sec 22 | Sec 20 | Annual value basis; same concept |
Determination of annual value | Sec 23 | Sec 21 | Self-occupied / let-out / deemed let-out rules unchanged |
Deductions from HP income | Sec 24 | Sec 22 | 30% standard deduction + interest on borrowed capital (Rs 2L limit for self-occupied) |
Deemed ownership | Sec 27 | Sec 25 | Same deemed owner provisions renumbered |
2.3 Profits & Gains of Business or Profession (व्यवसाय / व्यापार उत्पन्न)
Provision | Old Act (ITA 1961) | New Act (ITA 2025) | Brief Note |
Chargeability | Sec 28 | Sec 26 | Same scope; section restructured |
Allowable deductions | Sec 30–37 | Sec 28–39 | Consolidated; rent, repairs, depreciation, etc. |
Depreciation | Sec 32 | Sec 33 | Block of assets and rates unchanged; WDV method continues |
Disallowances (TDS default, cash payments) | Sec 40(a), 40A(3) | Sec 35 | 30% disallowance on non-deduction of TDS retained at Sec 35(b) |
Presumptive taxation (business) | Sec 44AD | Sec 58 (Table) | All presumptive schemes (44AD/ADA/AE) merged into one tabular section |
Presumptive (professionals) | Sec 44ADA | Sec 58 (Table) | Same thresholds; Rs 75L (business), Rs 50L (profession) if 95% digital |
Presumptive (transporters) | Sec 44AE | Sec 58 (Table) | Rs 7,500/month per vehicle; ≤10 vehicles |
Tax Audit | Sec 44AB | Sec 57 | Thresholds unchanged: Rs 1 Cr (business) / Rs 50L (profession) |
Books of account | Sec 44AA | Sec 56 | Same maintenance requirements |
Practical Tip for Businesses: If you're a trader, contractor, or professional using presumptive taxation under Section 44AD/44ADA, you now need to reference Section 58 of the new Act. The thresholds and rates are identical — only the section number has changed.
2.4 Capital Gains (भांडवली नफा)
Provision | Old Act (ITA 1961) | New Act (ITA 2025) | Brief Note |
Chargeability | Sec 45 | Sec 67 | Transfer of capital asset; same concept |
Short-term capital gains | Sec 111A | Sec 73 (with Schedules) | STCG on listed equity @20% |
Long-term capital gains | Sec 112/112A | Sec 74 (with Schedules) | LTCG @12.5%; Rs 1.25L exemption threshold |
Cost of acquisition / indexed cost | Sec 48–55 | Sec 69–72 | Indexation removed post 23 Jul 2024; 12.5% flat rate |
Exemptions (house purchase) | Sec 54, 54F | Sec 78, 80 | Same lock-in periods |
Capital gains bonds | Sec 54EC | Sec 79 | NHAI/REC bonds; Rs 50L limit; 5-year lock-in |
2.5 Income from Other Sources (इतर स्रोतांपासून उत्पन्न)
Provision | Old Act (ITA 1961) | New Act (ITA 2025) | Brief Note |
Chargeability | Sec 56 | Sec 92 | Residuary head; same concept |
Dividend income | Sec 56(2)(i) | Sec 92 read with Sec 93 | Taxable in hands of shareholder |
Interest income | Sec 56(2)(id) | Sec 92 | FD interest, savings interest, etc. |
Gifts / deemed income | Sec 56(2)(x) | Sec 93 | Same Rs 50,000 threshold for gifts |
Deductions from Other Sources | Sec 57 | Sec 94 | Collection charges, interest deduction (up to 20% for family pension) |
3. Exempt Income & Deductions — Where Did They Go?
Provision | Old Act (ITA 1961) | New Act (ITA 2025) | Brief Note |
Exemptions list | Sec 10 (97 clauses!) | Sec 11 + Schedule IV | Massively simplified; exemptions moved to Schedule IV |
Agricultural income | Sec 10(1) | Sec 11(1) / Sch IV | Exempt; no change |
Chapter VI-A deductions (80C, 80D) | Sec 80C–80U | Sec 123 + Schedule XV | Rs 1.5L aggregate under Sec 123 |
Medical insurance (80D) | Sec 80D | Sec 124 | Rs 25K / Rs 50K (senior) limits unchanged |
New Tax Regime (default) | Sec 115BAC | Sec 202 | Default regime; opt-out available |
Set-off of losses | Sec 70–80 | Sec 109–120 | Same hierarchy: intra-head → inter-head → carry forward |
For Salaried Employees: Your Section 80C investments (PPF, ELSS, LIC, etc.) are now claimed under Section 123 of the new Act. The Rs 1.5 lakh limit and all eligible instruments remain identical.
4. Transition Year — What Applies When?
The transition is governed by Section 536 of ITA 2025, which contains 22 sub-clauses. The core principle is simple:
Period | Which Act Applies | Example |
Up to 31 March 2026 | ITA 1961 | FY 2025-26 return (AY 2026-27) filed under old Act |
From 1 April 2026 | ITA 2025 | TY 2026-27 return filed under new Act |
During 2026, taxpayers will interact with both Acts simultaneously: filing the old return (AY 2026-27) while beginning compliance for the new Tax Year 2026-27.
What Carries Forward?: Losses brought forward, unabsorbed depreciation, options exercised, charitable trust registrations, and all pending proceedings continue as-is under Section 536(2). Nothing is lost in the transition.
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