Archive · 14 Aug 2025
India Amends Tax Act: Funds Get Breaks, Rules Simplified
The Indian government is changing some tax rules.
Now, certain foreign investment funds in infrastructure will get tax breaks.
The changes also make it easier to deal with tax searches, so businesses aren't stuck in confusing processes.
Also, workers will be able to use a standard tax deduction under the new tax system.
Finally, the rules for Unified Pension Scheme are being changed to match the ones for National Pension System.
The Income Tax Act of 1961 has been amended by the Indian government.
Tax exemptions on dividends, interest, and capital gains for sovereign wealth and pension funds investing in Indian infrastructure have been introduced.
Tax assessment processes during tax searches will be streamlined to reduce delays.
Salaried individuals can claim a standard deduction of ₹75,000 under the new tax regime.
The Unified Pension Scheme (UPS) and the National Pension System (NPS) will have equal tax treatment.
- Who
- Indian government
- What
- Amendments to the Income Tax Act of 1961
- When
- Effective from financial year 2025-26.
- Where
- India
- Why
- To provide better clarity, correct errors, and align existing schemes.
Government Initiatives
N/A
Investment Incentives
Government Initiatives
The government aims to boost infrastructure investments by offering tax benefits to sovereign wealth and pension funds.
N/A
N/A
Streamlined Tax Processes
Government Initiatives
The amendments are designed to improve business conditions by simplifying tax procedures, thus minimizing potential disputes during tax audits.
N/A
N/A
- Legislation
- Income Tax Act, 1961 (amended)
- Effective Date
- FY 2025-26
- Key Changes
- Tax exemptions for infrastructure investments; streamlined tax searches; standard deduction for salaried individuals; equal tax treatment for pension schemes.
- Fund Tax Exemption
- Dividends, interest, and long-term capital gains for sovereign wealth funds and pension funds
- Infrastructure Investment Period
- April 1, 2020, to December 31, 2030
- Standard Deduction
- ₹75,000 for salaried individuals
Sources
Section 87A Rebate: Is Income Up To Rs 12.75 Lakh Entirely Tax Free For Salaried? Check This Exception
New Income Tax Bill 2025 cleared: Major reliefs, compliance tweaks for corporate taxpayers
Tax Reform or Compliance Squeeze? Reading the Income Tax Bill 2025
Four changes to the Income Tax Act that will take effect in FY26 are explained
Income Tax Bill passed: Lower rates, bigger rebates, clearer rules for salaried taxpayers
New Income Tax Bill clarifies key deductions on house property income
