Daijiworld Media Network - New Delhi
New Delhi, Mar 25: The government is set to introduce the Income Tax Bill, 2025, for discussion during the Monsoon session of Parliament, Finance Minister Nirmala Sitharaman announced in the Lok Sabha on Tuesday. The proposed bill aims to replace the Income Tax Act, 1961, bringing much-needed clarity and ease to direct tax laws.
The Income Tax Bill, 2025, is designed to simplify the tax code, eliminate ambiguities, and reduce legal disputes. The Finance Ministry highlighted three core principles guiding the reform: ensuring clarity with a more structured and readable format, maintaining stability by avoiding major tax policy changes or rate modifications, and enhancing efficiency by removing unnecessary provisions to make compliance easier for taxpayers.
The revamped bill draws inspiration from global best practices, notably from Australia and the UK, ensuring a business-friendly environment. The reform has led to a significant reduction in the law’s complexity and volume. The word count has been slashed from 512,535 words in the current Act to 259,676, marking a 50% reduction. The number of chapters has been brought down from 47 to 23, while the total sections have been reduced from 819 to 536, eliminating 283 redundant sections. This overhaul simplifies language, consolidates amendments, and improves navigation, making tax compliance easier for individuals and businesses alike.
To enhance usability, the new tax framework integrates tables and formulae, making provisions more comprehensible. The restructuring also preserves existing taxation principles to ensure continuity while enhancing accessibility.
The government undertook extensive consultations, engaging tax professionals, industry experts, businesses, and professional bodies. Out of 20,976 online suggestions, relevant inputs were examined and incorporated where feasible.
With this comprehensive revamp, the Income Tax Bill, 2025, marks a significant step towards a simpler, clearer, and more efficient tax system in India.