Income-Tax Bill 2025: How provisions, sections for senior citizens have been covered under the new bill

The primary goal of the newly introduced Income-tax Bill, 2025 in Lok Sabha on Thursday is to simplify India's long-standing structure of direct taxation. This will be achieved by consolidating provisions and establishing a clearer and more straightforward legal framework.

It is important to note that the bill does not bring about significant changes to the existing direct taxation structure, ensuring consistency and stability. However, one notable difference from the current Act is that while it outlines deductions for expenses such as rent, life and health insurance premiums, contributions to provident fund, and home loans, it does not include a tax rate table for the old tax regime. The new tax regime does provide tax slabs in a tabular format.

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Provisions for senior citizens

Under the Income-Tax Act 1961, senior citizens are entitled to a deduction of up to Rs 50,000 for interest income from bank and post office deposits under section 80TTB. Similarly, general citizens can claim a deduction of Rs 10,000 for interest earned from savings account deposits under section 80TTA.

The new Income-Tax Bill 2025 has consolidated these provisions into a new Section 153, while retaining the tax benefits offered under the existing sections. According to the Central Board of Direct Taxes (CBDT), the new bill clearly outlines the eligibility criteria and deduction limits for various categories of taxpayers, eliminating the need to refer to multiple sections. This change is expected to improve clarity and user-friendliness, especially for senior citizens.

Section 153 of the Income-Tax Bill 2025

In accordance with section 153 of the Income-Tax Bill 2025, senior citizens are eligible to claim a tax deduction of Rs 50,000 for interest income earned from savings accounts and time deposits in banks, post offices, and cooperative banks.

The updated bill specifies that a time deposit refers to a deposit that is repayable at the end of fixed periods. For senior citizens, time deposits encompass fixed deposits and senior citizen savings scheme (SCSS) accounts.

In contrast, under the revised bill, general citizens and Hindu undivided families (HUFs) can claim a deduction of up to Rs 10,000 for savings account interest only. They are not eligible for interest deductions on fixed deposit income.

Furthermore, no deduction is permissible under section 153 for income derived from any deposit in a savings account maintained by or on behalf of a firm, association of persons, or body of individuals.

What has been removed

The Income Tax Bill has removed more than 300 provisions of the current Income Tax Act that have become redundant or were omitted over time, such as Section 80CCA (deduction for investment in National Saving Scheme), Section 80CCF (deduction for investment in long-term infrastructure bond), etc.

TDS and TCS clauses

The new Bill suggests implementing TDS regulations on a variety of income sources such as salaries, professional fees, interest income, and rent. 

Additionally, TCS will be applied to specific transactions including the sale of alcohol, tendu leaves, minerals, scrap materials, motor vehicles over Rs 10 lakh, and foreign remittances exceeding Rs 7 lakh. 

Consequences for failing to comply with TDS/TCS requirements may include being deemed in default for not deducting or paying TDS/TCS, as well as incurring a 1% per month interest penalty on any outstanding TDS/TCS amounts.