Income Tax Act, 1961 — Complete Guide
Complete guide to the Income Tax Act, 1961 — India's primary direct tax law covering income slabs, deductions, TDS, capital gains, and filing requirements for individuals, HUFs, and companies.
🏛️ Background
The Income Tax Act, 1961 replaced the Indian Income Tax Act of 1922 and came into force on 1 April 1962. It is administered by the Central Board of Direct Taxes (CBDT) under the Department of Revenue, Ministry of Finance. The Act applies to the whole of India and governs the levy, administration, collection, and recovery of income tax.
💰 Income Tax Slabs — New Regime (Default from FY 2023-24)
| Annual Income (₹) | Tax Rate |
|---|---|
| Up to ₹4,00,000 | Nil |
| ₹4,00,001 – ₹8,00,000 | 5% |
| ₹8,00,001 – ₹12,00,000 | 10% |
| ₹12,00,001 – ₹16,00,000 | 15% |
| ₹16,00,001 – ₹20,00,000 | 20% |
| ₹20,00,001 – ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
As per Union Budget 2025-26. Standard deduction of ₹75,000 available. Rebate u/s 87A up to ₹60,000 (taxable income up to ₹12,00,000 → zero tax).
🏷️ Key Deductions — Old Regime
Section 80C — ₹1.5 Lakh Limit
PPF, ELSS, NSC, EPF, LIC premiums, tuition fees, home loan principal, Sukanya Samriddhi, 5-year FD, NPS (Tier I — additional ₹50,000 u/s 80CCD(1B)).
Section 80D — Health Insurance
₹25,000 for self/family + ₹25,000 for parents (₹50,000 if senior citizen). Preventive health check-up ₹5,000 within this limit.
Section 24(b) — Home Loan Interest
Up to ₹2 lakh deduction on interest paid for self-occupied property. No limit for let-out properties (set-off against other income capped at ₹2 lakh).
Section 80E — Education Loan
Interest on education loan (no cap) for self, spouse, or children. Available for 8 years or until interest is fully repaid, whichever is earlier.
📊 Capital Gains Tax
| Asset Type | STCG | LTCG | Holding Period |
|---|---|---|---|
| Listed Equity / Equity MFs | 20% | 12.5% (above ₹1.25L) | 12 months |
| Debt MFs / Gold / Unlisted | Slab rate | 12.5% | 24 months |
| Real Estate | Slab rate | 12.5% (no indexation) | 24 months |
Post Union Budget 2024. Indexation benefit removed for all assets acquired after 23 July 2024 (except property acquired before that date where taxpayer can choose).
📅 Key Dates for Taxpayers
🔗 Related Tools
⚠️ Disclaimer
This page is for educational and informational purposes only and does not constitute legal, tax, or financial advice. While we strive for 100% accuracy, laws and regulations change frequently. Always refer to the official gazette notifications, consult a qualified Chartered Accountant (CA), Company Secretary (CS), or legal professional before making any financial or legal decisions. Tenhash is not responsible for any actions taken based on this information. Last reviewed: March 2026.