Finance Minister Nirmala Sitharaman presented a new Income Tax Bill in the Lok Sabha on Thursday. The bill was approved by the Cabinet on February 7. After being introduced in the Lok Sabha, it will now be sent to the Parliamentary Finance Committee for review. The committee will study the bill and give its recommendations. Once the recommendations are made, the bill will be sent back to the Cabinet for approval. After getting approval from the Cabinet again, it will be reintroduced in Parliament. The final decision on the bill will be taken after discussions in Parliament. If approved, it will become a law. The new bill aims to bring changes to the existing tax system. The government believes it will simplify tax rules and benefit taxpayers. The entire process may take some time, as different stages of approval and discussion are required before the bill is implemented.
The New Income Tax Bill 2025 is an important step toward improving India’s tax system. The main goal of this bill is to make the tax system simpler, more organized, and transparent. Currently, income tax rules in India follow the Income Tax Act of 1961. Once the new bill is approved, it will replace the old law and become the Income Tax Act 2025. Several changes will be made to tax provisions under the new rules. One significant change is the removal of the assessment year, replacing it with the tax year. Under this system, the tax year will begin on April 1 and end on March 31 of the following year. The government believes these changes will make tax filing easier for individuals and businesses. The new law aims to modernize the tax structure and improve compliance, ensuring a fair and efficient system for taxpayers across the country.
The proposed bill has been written in simple language to make it easier for taxpayers to understand. To simplify tax rules, the number of sections has also been reduced. The new bill does not introduce any new taxes. It consists of 536 sections spread across 622 pages, whereas the current Income Tax Act, 1961, has 823 pages. Once approved, the Income Tax Bill 2025 will replace the existing law and become the new Income Tax Act 2025. The old Income Tax Act of 1961 will then be abolished. The new law is expected to take effect from April 1, 2026. The aim of this bill is to modernize the tax system, making it more efficient and user-friendly. The government hopes these changes will reduce confusion and improve tax compliance, ensuring a smoother process for taxpayers while maintaining transparency in the system
