A Partial Reform: Income Tax Act, 1961 2025

The enactment of the Income Tax Act, 2025, replacing the 1961 law, was expected to be a turning point in India’s economic history. After decades of functioning under a law designed for a socialist economy of the 1960s, taxpayers, investors and professionals anticipated a modern, simplified, and growth-oriented framework. Instead, what emerged is a repackaging of the old law with linguistic modernisation. The essence remains unchanged—an example of “old wine in a new bottle”, may be with some fizz. More troubling is the continuation of contradictory policy-making, where incentives are offered with one hand and clawed back with the other. This perpetuates uncertainty, fosters litigation, and erodes confidence in the stability of India’s tax regime.

CONFUSION IN POLICY MAKING

The core issue lies not in drafting style but in the confused approach of Indian tax policy. For decades, the government has introduced exemptions, deductions, and incentives, only to dilute or withdraw them through counter-provisions. This cycle undermines the very objective of incentives. Unfortunately, the 2025 Act has done little to change this mindset, merely replicating contradictions under a new facade.

CORPORATE EXEMPTIONS VS. MAT

A prominent example of contradiction is the Minim