โญFinance Minister Sitharaman introduces Income Tax Bill, 2025, in Lok Sabha amid opposition parties opposing its introduction. Sitharaman also urged the speaker to refer Income Tax Bill, 2025, to Select Committee of Lok Sabha.
เดSitharaman also urged the speaker to refer Income Tax Bill, 2025, to Select Committee of Lok Sabha.
โญFinance Minister Sitharaman introduces Income Tax Bill, 2025, in Lok Sabha amid opposition parties opposing its introduction. Sitharaman also urged the speaker to refer Income Tax Bill, 2025, to Select Committee of Lok Sabha.
๐ปWith the introduction of the new bill, the government plans to replace the decades-old income tax laws with a new income tax bill, which was announced in the Budget 2025.
โThe Bill introduces a new concept of 'tax year' as the 12-month period beginning from April 1. This would replace the present concept of assessment and previous year where the income earned in the previous year (PY), say in the year April 2024 to March 2025, would be assessed in assessment year (AY) 2025-26.
๐งIncome Tax Bill, 2025, simplifies language, omits redundant provisions, uses shorter sentences.
เฒ The Bill does not impose any new taxes, only puts together the taxability provisions provided in the Income Tax Act, 1961.
๐ Comprises 536 sections, 23 chapters and 16 schedules in just 622 pages. This compares with 298 sections, 23 chapters and 14 schedules in the 1961 Act.
๐If approved, the new law will come into effect from April 1, 2026 and rules to be put in place once Act is notified.
๊ฆIncludes both old tax regime and new tax regime for individuals, HUFs and others.
๐ป 'Tax year' concept introduced, complicated terms like 'Previous year' and 'Assessment year' omitted in the new Bill.
๊ฉฒThe word 'notwithstanding' removed, replaced with 'irrespective'.
๐ Does not refer to 'explanations or provisos', instead uses tables and formulae.
๐ฎTaxpayer's Charter, which outlines the rights and obligations of taxpayers, included in the Bill.
โThe Bill provides for special provision for capital gains computation in case of market-linked debenture.
๐ Income not forming part of total income moved to Schedules to simplify the statute.
๊ฆDeductions from salaries such as standard deduction, gratuity, leave encashment etc, tabulated at one place, instead of being scattered over different sections/rules.
โAccording to PTI, the tax administrators, practitioners and taxpayers had also raised concerns about the complicated provisions and structure of the Income-tax Act.
โTherefore, the government in the budget in July 2024 announced that a time-bound comprehensive review of the Income-tax Act, 1961 would be undertaken to make the Act concise, lucid, easy to read and understand.
๐Accordingly, the Income-tax Bill, 2025 has been prepared, which proposes to repeal and replace the Income-tax Act, 1961.