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The Direct Tax Code 2025 brings several significant changes aimed at simplifying the tax system and making compliance easier. These changes aim to modernize India’s direct tax system, simplify filing, improve compliance, and attract investment, especially by aligning the tax code more closely with global standards.
Parameter | Income Tax Act, 1961 | Direct Tax Code (DTC), 2025 |
---|---|---|
Residential Status | ROR, RNOR, NR | Resident and Non-Resident |
Audit Authority | Chartered Accountant | Chartered Accountant, CS, CMA |
Year Terminology | Previous Year and Assessment Year | Financial Year |
Dividend Tax | DDT at 15% | Taxed at 15% (no DDT) |
Distributed Income | LIC and mutual fund income exempted | Taxable at 5% |
High-Income Tax Rate | 30% + 15% surcharge for income > ₹10 crore | 35% for income > ₹10 crore |
Capital Gains Tax | Special rates applied | Normal income taxation |
Income Categories | Income from Salary, Other Sources | Employment Income, Residuary Income |
Structural Complexity | 298 sections with sub-sections | 319 simplified sections, no sub-clauses |
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