The Income Tax Act 2025 completely overhauled the older Income Tax Act, 1961, condensing the legal framework into 536 sections and replacing the old concept of “Previous Year/Assessment Year” with a unified “Tax Year”.
Under this new modernized structure, the section numbers for exemptions, heads of income, and standard deductions have entirely changed.
The mapped chart below details the core sections governing exemptions, deductions, and tax calculations under the Income Tax Act 2025:
Core Structural & Slab Sections
| Particulars | Old Act (1961) | New Act (2025) | Impact / Rules in New Act |
| New Tax Regime Rates | Section 115BAC | Section 202 | Now the official default tax regime mechanism with updated slabs. |
| Tax Rebate (Zero Tax) | Section 87A | Section 156 | Provides a 100% tax rebate if your net taxable income is up to ₹12,00,000. |
| Standard Deduction (Salary) | Section 16(ia) | Section 19 | Fixed deduction of ₹75,000 automatically reduced from salary. |
Income Heads & Exemptions Framework
The entire list of incomes that do not form part of your total taxable income has shifted out of the old Section 10 structure.
| Functional Area | Old Act (1961) | New Act (2025) | Operational Status |
| Exempt Income (General) | Section 10 | Section 11 | Serves as the primary umbrella for non-taxable incomes, routing to specialized Schedules (e.g., Schedule VI for retirement exemptions). |
| Agricultural Income | Section 10(1) | Section 11 (read with definitions) | Fully Exempt from direct taxation. |
| Salary Income Head | Section 15 & 16 | Section 15 & 16 | Defines what constitutes taxable salary components. |
| Income from House Property | Section 22 | Section 20 | Charging section for rental income. |
| House Property Deductions | Section 24 | Section 22 | Governs deductions like standard repairs (30%) and home loan interest. |
| Income from Other Sources | Section 56 | Section 92 | Governs gifts, family pensions, and miscellaneous interests. |
Consolidation of Deductions & TDS
To minimize confusion, the new Act groups scattered provisions into cleaner, singular buckets.
| Matter | Old Act (1961) | New Act (2025) | Key Rule |
| 80C Investments (Old Regime) | Section 80C | Section 123 | Blocked under the default default regime; active only if opting out. |
| NPS (Employer Contribution) | Section 80CCD(2) | Section 124 | Allowed under the default regime up to 14% of salary. |
| Medical Insurance (80D) | Section 80D | Section 126 | Blocked under default regime. |
| Tax Deducted at Source (TDS) | Sections 192 to 194T | Section 393 | Over 60 old TDS sections are consolidated into this single code-based mega-section. |
| Filing Return of Income | Section 139 | Section 263 | Governs mandatory timeframes and protocols for submitting tax returns. |
If you are navigating your taxes now, the old standard codes like “Section 10” or “Section 115BAC” are replaced. For your regular tax filing, Section 202 (Tax Slabs), Section 19 (Standard Deduction), and Section 156 (Tax Rebate) are the new primary numbers to remember.
5 FAQs on Exempted Income and Deductions under the Income Tax Act, 2025
Q.1 What are the major changes introduced by the Income Tax Act, 2025?
Ans. The Income Tax Act, 2025 replaces the Income-tax Act, 1961 with a simplified framework comprising 536 sections. It also replaces the concepts of “Previous Year” and “Assessment Year” with a single “Tax Year” and renumbers various provisions relating to tax rates, exemptions, deductions, and return filing.
Q.2 Which sections should taxpayers remember under the new Income Tax Act, 2025?
Ans. Some of the key provisions include Section 202 for the default new tax regime and tax slabs, Section 156 for tax rebate, Section 19 for the standard deduction on salary, Section 11 for exempt income, Section 123 for deductions corresponding to the earlier Section 80C, and Section 263 for filing income tax returns.
Q.3 Are deductions like Section 80C and Section 80D available under the default new tax regime?
Ans. No. Under the default new tax regime, deductions corresponding to the earlier Section 80C (now Section 123) and Section 80D (now Section 126) are generally not available. However, the employer’s contribution to NPS under Section 124 continues to be allowed within the prescribed limits.
Q.4 What is the standard deduction and tax rebate available under the Income Tax Act, 2025?
Ans. The Act provides a standard deduction of ₹75,000 from salary under Section 19. It also provides a 100% tax rebate under Section 156 where the net taxable income is up to ₹12,00,000, subject to the applicable conditions.
Q.5 Has the treatment of exempt income changed under the new Act?
Ans. The framework for exempt income has been reorganized. General exempt income is now covered under Section 11, while agricultural income continues to remain exempt from direct taxation. The new Act also restructures provisions relating to salary, house property, and other sources of income under new section numbers.
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