Income Tax Bill: The much awaited Income Tax Bill after the budget is going to be presented by Finance Minister Nirmala Sitharaman in the Lok Sabha today. With the new Income Tax Bill coming into effect, the six decade old Income Tax law will change.
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Income Tax Bill 2025: The much awaited Income Tax Bill after the budget will be introduced by the government in the Lok Sabha on Thursday. The bill to amend the Income Tax Act has been listed for introduction in the Lok Sabha. According to the agenda circulated by the Lok Sabha Secretariat a day earlier on Wednesday, Finance Minister Nirmala Sitharaman will introduce the Income Tax Bill, 2025. The bill has been awaited for a long time. In this bill, the term ‘tax year’ will be used instead of terms like ‘tax assessment’ and ‘previous year’.
The new bill will replace the Income Tax Act, 1961
Such changes are being made to simplify the language. Apart from this, provisions and clarifications will also be removed. The new bill has 536 sections, 23 chapters and 16 schedules. There is no mention of imposing any new tax in the 622-page new Income Tax Act. This bill is to simplify the language of the existing Income Tax Act, 1961. There are 298 sections and 14 schedules under the six-decade-old existing Income Tax Act. When this Act was introduced, it had 880 pages. The new bill will replace the Income Tax Act, 1961.
The current Income Tax Act has become much bigger
The current Income Tax Act has become much bigger due to the changes made in the last 60 years. The new Income Tax Act is expected to come into force from April 1, 2026. Important sections related to fringe benefit tax have been removed in the new bill. The bill being free from ‘explanations or provisions’ makes it easier to read and understand. Along with this, the word ‘despite’, which was used many times in the Income Tax Act, 1961, has been removed in the new bill and the word ‘inevitable’ has been used almost everywhere in its place.
‘Tax Year’ will be used instead of ‘Previous Year’
The bill uses short sentences. It has been made readable through tables and formulas. Tables have been provided for provisions related to TDS, estimated taxation, deduction for salary and bad debt. The new bill also provides a ‘Taxpayer Charter’ which outlines the rights and responsibilities of taxpayers. The bill replaces the term ‘Previous Year’ given in the Income Tax Act, 1961 with ‘Tax Year’. Also, the concept of assessment year has also been abolished. After being introduced in the Lok Sabha today, it will be sent to the Parliamentary Standing Committee on Finance for further discussion.
In the new Income Tax Bill 2025, not only the provision of tax exemption, but many important changes are also being made to simplify the entire tax system. In this, ‘Assessment Year’ will be changed to ‘Tax Year’. Difficult words of the British era like ‘Notwithstanding’ will be removed. The language of the law will be simplified, so that it will be easy for taxpayers to understand it.
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