New Income Tax Bill 2025 Introduced In Lok Sabha By FM Nirmala Sitharaman

After being tabled in Lok Sabha, the Bill will be sent to the Parliamentary Standing Committee on Finance for further deliberations. 

The bill will not change the existing tax slabs or review the tax rebate given. Instead, it aims to make the six-decade-old legislation reader-friendly.

The new Income Tax Bill is part of the tax reforms to streamline and simplify the provisions so that they are easier to understand and reduce the scope for legal disputes. 

The Income Tax Bill is being reduced to 622 pages and contains 536 clauses. It will replace the existing 64-year-old law that runs into 823 pages with 819 sections. It seeks to simplify the language by introducing clearer terms, such as replacing 'assessment year' with 'tax year'. It will eliminate various convoluted provisions and explanations to make it easier to understand and reduce the scope of legal disputes. Some archaic clauses are being dropped as part of the simplification process.

The legislation will supersede the Income Tax Act, 1961, which has grown extensively due to numerous modifications carried out over six decades. 

Its primary objective is to simplify the tax laws, ensuring they are more transparent, easier to interpret, and taxpayer-friendly. By replacing complex provisions with clearer provisions, it aims to reduce legal disputes and encourage voluntary tax compliance.