If you’re preparing to file your income tax this year, there’s a new rulebook in place. The Income Tax Act 2025, which came into effect from 1 April 2026, is not just a replacement of the old law—it also changes how you interact with the tax system.
From a revamped e-filing portal to a new payment system and updated forms, the shift is already visible. But beyond the tech upgrades, there are a few important sections in the new law that every taxpayer should understand.
Let’s have a look at the 6 key sections which cover most of what affects your day-to-day tax planning.
This section explains which types of income are excluded from your total taxable income. It largely covers areas like charitable trusts and donations.
While this concept existed earlier under Section 10 of the 1961 Act, the new law presents it in a more organised manner, making it easier to understand what qualifies for exemption and how to claim it properly.
If you have a home loan, this section is important. It allows you to claim deductions on interest and principal repayment related to property.
This is similar to the earlier provisions under Section 24, but the updated version aims to remove confusion by laying down clearer rules. For homeowners, this means continued tax benefits, but with better clarity on eligibility and limits.
Section 126 covers deductions related to health and medical insurance premiums. Earlier governed by Section 80D, this provision continues to encourage individuals to invest in health cover, which is becoming increasingly important.
The new framework simplifies how these deductions are claimed and may also make it easier for taxpayers to plan their finances with a long-term perspective.
Section 156 introduces provisions for tax rebates for certain individuals, replacing the earlier Section 87A.
The key improvement here is ease of claiming these rebates, which directly reduce the amount of tax payable. For eligible taxpayers, this could mean lower tax outgo with less complexity during filing.
Section 202 is particularly significant as it defines the new tax regime, which is now the default option for most taxpayers. This replaces the earlier structure under Section 115BAC.
While the new regime offers lower tax rates with fewer deductions, taxpayers still have the option to choose the old regime if it better suits their financial planning. This flexibility allows individuals to decide based on their income structure and investment habits.
Finally, Section 263 deals with the filing of income tax returns and related compliance requirements. It replaces and streamlines provisions that were earlier spread across Section 139 and related notices.
The aim is to make the filing process smoother, reduce errors, and ensure better compliance. For taxpayers, this means a more guided and user-friendly experience when submitting returns, especially with the updated e-filing portal supporting these changes.
Overall, these sections reflect a shift towards clarity, simplification and better compliance, while largely retaining the core benefits that taxpayers were already familiar with under the previous law.